Wednesday, October 20, 2010

How does an entrepreneur stimulate the economy?

  1. Employment - An entrepreneur, by setting up various businesses is generating employment in the economy. This is a major contribution because a job provides income to an employee who can then meet his or her needs.
  2. International trade - An entrepreneur promotes international trade by exporting his or her products abroad. Any entrepreneur would like a wider market. If there are more consumers to purchase his or her products, the higher his profits.
  3. Contributes to gross national product - An entrepreneur makes much contribution to the national exchequer and to the national economy as whole. The GNP of the country is calculated based upon the total number of products and services available in a respective country. The more products and services available the higher the GNP. It indicates the economic prosperity of the country.
  4. Investment - The entrepreneur will invest in products and services which people need, meaning more goods and services will be at their disposal.
  5. Diversity in products and services - An entrepreneur can provide various types of goods and services to the consumer.