Explain how economic activity is an ordinary business of life.
Everyday in our life we face Economics. We go to the shop,buy something,pay to the shopkeeper,we derive some utility from the goods we buy.This is an economic activity.
More formally,an economics activity is the one which involves production,distribution and consumption of goods and services.At micro level,we make choices whether to buy an ice cream or not keeping in view available money with us.At macro level,India as a whole is continuously producing goods and services and at every point of time somebody is buying and the other is selling goods and services.So,there is a continuos economics activity going on in the economy.So,in a way economic activity is the ordinary business of life.
Our income constraint and choice and preference show nature and level of economic activities of households individualy.GDP on the other hand tells us the aggregate level of economic activity at a specific point of time in the whole country.