Businesses provide goods and services that drive economic output, according to About.com. The law of supply and demand dictates that companies can step in and begin producing products if an economy is not able to produce high-demand goods to satisfy the public.Know More
Supply and demand also works when prices fall due to lack of demand from the public, About.com states in an article adapted from the U.S. Department of State. This causes businesses to fail or switch to manufacturing other goods. This is known as a market economy, which is different from a socialist economy, an economic system whereby the government plays a more central role in the economy.
Small businesses in particular foster economic growth by hiring people, and large corporations benefit from the productivity of smaller companies, according to the Houston Chronicle. Successful small businesses also contribute to communities by paying taxes. Some small businesses morph into larger companies that participate in the national and international markets.Learn more about Financial Planning
Labor productivity is determined by dividing the output, or total amount of goods or services produced, by the number of workers. Labor productivity is used to measure worker efficiency.Full Answer >
Brazil's economy classifies as free market, which features an exchange of goods, services and commodities internally and with other nations. Brazil varies in degree of economic freedom; in the early 2000s, Brazil's economy classified as mostly free, then waned in status to a status of "mostly unfree" in the latter half of the decade.Full Answer >
The term "industrial sector" is an economic designation from the three-sector hypothesis for the part of the economy devoted to producing goods, as opposed to sectors devoted to providing services and raw material products. The industrial sector is also referred to as the secondary sector or the manufacturing sector.Full Answer >
According to Investopedia, microeconomics is the study of decisions made by people and businesses regarding the allocation of resources and prices of goods and services, while macroeconomics is the study of the behavior of the economy as a whole. Microeconomics focuses on individual companies, and macroeconomics looks at countries and governments.Full Answer >