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Business Economics is said to be a 'Science' chiefly because it:
AStudies only the aggregates of the national economy
BApplies rules and principles to attain set objectives
CRelies purely on unrealistic theoretical assumptions
DEstablishes cause-and-effect links by systematic methods
Answer & Solution
Correct answer: D. Establishes cause-and-effect links by systematic methods
1. Science is a systematized body of knowledge establishing cause-and-effect links.
2. Business Economics qualifies as a science because it follows scientific methods and tests results empirically.
3. So 'establishes cause-and-effect links by systematic methods' is the answer.
4. Trap B: applying rules to attain set objectives is why it is also an Art, not a Science.
5. Trap C: relying on unrealistic assumptions describes abstract Micro theory, not what makes it a science.
6. Trap A: studying only national aggregates is the macro focus, not the basis for calling it a science.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 1 Unit I "Nature and Scope of Business Economics", p.6_
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