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CA Foundation · Business Economics · Nature and Scope of Business Economics

Which of the following best describes the nature of Business Economics as a discipline?

Business Economics is both a science and an art. It has a systematic body of principles and analytical tools, and it applies them to practical business decisions. It is therefore not purely positive, not merely an art, and certainly not a branch of accounting.

  1. APurely a positive science with no role for value judgements
  2. BBoth a science and an art, offering tools for decision-making and their practical applicationCorrect
  3. COnly an art, since it deals with individual business firms
  4. DA branch of accounting that records business transactions

Explanation

Business Economics applies economic theory and analytical methods to business problems, so it is a science because it has a systematic body of knowledge and an art because it guides practical decisions. It is also not limited to positive analysis, since it takes up normative questions in managerial decisions. Accounting records transactions, so option D is wrong.

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