What does the SIC classify?

The correct answer reflects the purpose of the Standard Industrial Classification (SIC) system, which is designed to categorize businesses based on the types of activities they engage in. This classification system enables various organizations, including government agencies and researchers, to collect, analyze, and compare data related to different industries. By grouping businesses with similar operations, the SIC facilitates economic analysis and the assessment of industry trends.

The SIC is particularly useful for economic indicators, market research, and policy formulation because it provides a standardized framework for understanding and evaluating the diverse sectors of the economy. Thus, option B accurately captures the essence of what the SIC system accomplishes by organizing businesses according to their primary activities, allowing for a clear understanding of industry dynamics.