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

Which of the following best shows that Business Economics is both a science and an art?

Business Economics is both a science and an art because it has a systematic set of principles and also helps managers apply them practically to achieve business objectives. Relying only on mathematics, only on experience, or only on describing history would cover just one side.

  1. AIt uses a systematic body of principles and also guides managers in applying them to achieve business objectivesCorrect
  2. BIt uses only mathematics and avoids all judgement
  3. CIt relies only on the personal experience of managers
  4. DIt is limited to describing past business events without guidance

Explanation

As a science, Business Economics has a systematic body of knowledge with principles that explain cause and effect. As an art, it offers guidance on applying these in practice to meet objectives. Pure mathematics or pure experience ignores one side, and mere description of the past lacks the prescriptive element.

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