The basic economic activities such as production, consumption and capital accumulation are explained below along with their importance.
Hi friends, in today’s article we are going to know about types of Economic Activities (What are economic activities class 9). So let’s discuss in details.
What are economic activities class 9?
There are three types of economic activities such as production, consumption and capital accumulation.
• Production – The term “production” is conversion of resources and raw materials into useable products either tangible or intangible.
It is a physical process carried out under the responsibility, control and management in which factors of production are used to transformation input into output of goods and services.
Importance of Production
(i) The productive activities generate a continuous flow of consumable goods and services which maximize the wants of the society.
(ii) Production is the source of supply, therefore higher the production, higher is the standard of living and vice-versa.
(iii) Production activities increases the level of income of the community.
(iv) Production also expand the volume of trade.
What is Consumption?
• Consumption – Consumption means securing satisfaction through the use of goods and services. In broader sense consumption means use of economic goods and personal services in the satisfaction of human wants.
According to Meyers consumption is the direct and final use of good and service in satisfying of human wants.
Consumption is said to be direct, when the use of a commodity results in direct satisfaction to the consumer. Conversely consumption is said to be indirect when a commodity is bought for production of another product.
Importance of Consumption
(i) All types of production whither from farming, plantation or industries, take place because of consumption.
(ii) Every Consumers aims is to maximize satisfaction by consuming.
(iii) The business man can get huge profits due to strong consumer demand.
(iv) Different types of government policies like taxation prices, wages are strongly influence by the propensity to consume.
What is Capital Accumulation?
• Capital Accumulation – The capital accumulation means an expansion in the stock of physical capital. But in the broad sense the capital accumulation denotes the net addition in case of both physical and human capital during a particular period of time.
Importance of Capital Accumulation
(i) A high and increasing rate of capital accumulation increase productions in the economy.
(ii) The higher rates of saving and investment can promote human capital for nation in the economy.
(iii) An expansion of capital accumulation leads to expansion of different productive sectors in the economy.
(iv) Greater capital accumulation promotes technical improvement in the economy.
So friends, this was the concept of Economic Activities (What are economic activities class 9). Hope you get the full details about it and hope you like this article.
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