Economic activity definition

Money is not everything, but it majorly rules our life daily. The world goes round by money, and daily, we contribute to the local or international economy. Now the major question arises what economy is? The economy is the state of money (including resources or wealth) of a local region, state, or country.

"The term economy refers to how well the production and consumption of goods and products occur with their quality too." The economy defines how a region, country, state, or city makes and spends money. In this, it is decided by the government how scarce resources are used, which also decides the consumption and production of goods and services. Resources refer to land, raw material, and people (those who can work on these or innovate through their ideas). All the decisions about goods and services based on the market's demand (what people want to buy) and supply (how much business can provide) are made under a country's economy. The economy is very important for a country and its people. It's the answer to all these questions:

What resources does a country, state, or region have?
Is the amount of money being saved and borrowed by people?
How many goods and services are being produced?
Should taxes be raised or lowed by the government?
How much does a rise in prices affect people's decisions about spending?

When a consumer or person decides to buy or sell something, it affects the economy at every level because the economy represents a region, nation, a single industry, or even a family. Few economies in this modern world are purely command-based or market-based. Some types of economies are pure market economy, traditional economy, mixed economy, and pure command economy.

The economy is a vast area that involves different activities, which are called economic activities. An activity contributes to the country's economy as every country's economy develops differently. Therefore,

"Economy activities is the collection of those activities required to build a country's wealth through whatever means are available or well-defined activities serving the country's economy."

"When resources like labor, capital goods, manufacturing techniques or intermediary products perform an activity to produce specific services and goods called as economic activity."

"Economic activity is the combination of input of resources, a production process and an output of products."

Economic activities aim

The only motive, aim, or goal of all economic activity's to make money by producing goods and services and making them available to customers. We perform economic activities to earn money, income, or wealth.

Economic activities characteristics

Resource Usage	Economic activities include resource utilization like labor, land, capital, etc.
Rational usage	By allocating scarce resources rationally, maximize your profit in economic activities. With this, we can make optimum use of labor, capital, land, and other factors involved in production.
Economic motive	All the activities are done only and only to earn money and acquire wealth. That's why they are considered a source of income or to earn their livelihood. For example, a laborer works in construction (makes buildings and houses) and gets paid for that. This is the source of its income generation.
Socially accepted	Economic activities are not socially undesirable as they adhere to social norms.
Legally binding	Economic activities are performed for monetary gain only when they are lawful. All the activities must be legal, but some illegal activities (like smuggling, theft, burglary, and back money smuggling) are not included under the purview of economic activities.
Productive in nature	Economic activities are designed with the motive of earning, and earnings happen due to the production of goods and services. Therefore economic activities are productive. For example, a worker earns by working in a factory where he produces goods, a teacher teaches students with teaching services, a scientist gets paid for his work, but his inventions give us new products, and the same a software engineer provides software services.

Types of kind of economic activities

a. Primary EA

In primary sector economic activities, we use natural resources like forestry, hunting, animal husbandry, mining, agriculture, and fishing. This sector is vital in less developed countries but less important in industrial countries. Nation's economies rely on primary activities in trading goods in different chains. Primary economic activities are responsible for providing the raw material for other sectors for which they use the assistance of the earth in producing the final goods. The secondary and tertiary sectors use the raw material produced as a final product.

People producing primary goods working in primary sectors are called red-collar workers, involved in outdoor activities.

b. Secondary EA

In this sector of economic activities, people use raw materials to manufacture or produce new products of greater value, such as manufacturing textiles into clothing and steel into cars. These activities add value to existing products (raw materials) with the proper manufacturing and production process. A bit complex process carried out by workers and workers is called blue-collar workers.

c. Tertiary EA

This sector includes economic activities that serve the general population and businesses such as wholesale, transportation, retail, healthcare, food business, entertainment business, law, etc. The tertiary economic sector depicts the personal and business services in which physical products are not produced. The person involved in these activities has specialized knowledge about working subject experts and work, and they are termed pink-collar workers.

d. Quaternary sector/ EA

In this, the economic activities describe the knowledge-based part of the economy that includes services like information generation and sharing, information technology, media, research, and development. These services are developed from tertiary services and allocated to certain workplaces. The workers in this sector are legal consultants, researchers, software personnel, etc., termed white-collar workers.

e. Quinary EA

With these economic activities country's economy is directly affected because here, high-level decisions are made by top-level executives in the business, government, industry, non-profit organizatin, media, education, etc., that have a direct impact on the economy. Therefore, it is considered as a top economic sector.

Non-economic activities

Non-economic activities are opposite to economic activities performed to render services to others with a motive of selfless helping and not for any financial gain. Here preference is given to personal satisfaction and humanity regardless of financial benefit. These activities are performed out of love, patriotism, sentiments, and care. There are some of the non-economic factors that have an impact on economic growth and social development, i.e., religion, class, caste, culture, tradition, social and political dependency, the role of the individual, religion, role of government, language as a resource of human capital, corruption, etc.

Non-economic activities work as fixers that strengthen humanity's power and empower patriotism. These are essential for any nation to bond its citizens altogether.

Examples of non-economic activities: running NGOs, giving donations, providing free services, helping people with their work, etc.

Non-economic activity characteristics

Imperative	When you work for someone without generating any monetary profit but can be undertaken as an obligation or compulsion to satisfy social norms.
Self-satisfaction	As non-economic activities are not government certified, they are voluntary and can be taken solely for self-satisfaction.
No financial remuneration	As we know, financial profits are not involved in these non-economic activities therefore, they are unimportant for an economy.

Economic activities V/s non-economic activities.

Parameters	Economic activities	Non-economic activities
Definition	Such social and official activities performed to earn money	Such activities are performed to earn satisfaction, not the money
Expectations	Expectations of income and profit	No profit or income is expected from these activities
Motive	Earning profit	Psychological and social motive
Outcome	Results in assets and wealth	Result in satisfaction and happiness
Considerations	These activities are motivated by rational concern (use of scarce resources like labor, land, capital, etc.)	These activities are motivated by sentimental and motivational reasons without any economic benefit or motive.
Approach	Use of a pragmatic approach	Use of an ideological approach
National income	These activities add value to the national income	These activities do not affect the national income

Conclusion:

Finally, economic activities are efforts made by people to earn money, wealth, and income for their life and nation too. With these, they can secure maximum satisfaction of wants with scarce and limited means. On that, non-economic activities are executed with impractical motives and feelings of sympathy, love, patriotism, and humanity, like donation, dancing, social work, playing, being a housewife, and helping others without any personal benefit.

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