Question

B) Answer the following questions.

Answer 1

Answer:

Yes, agree, business transactions are economic transactions. Two reasons why:

• Profit motive: economic transactions have a profit motive: they are carried out and agreed upon between the two parties, because the parties feel that they will be better off after the transaction is completed. Business transactions are based on the profit motive.
• Things of value: goods and/or services, are exchanged between the parties. In business transactions, either a good (for example, an asset), or a service (for example, employees), is always exchanged.