Given $n$ people, we can form a committee of size $m$ in ${n\choose m}$ ways. Once the committee is formed we can form a sub-committee of size $k$ in ${m\choose k}$ ways. Thus we can form a committee of size $m$ with a sub-committee of size $k$ in ${n\choose m}{m\choose k}$ ways. We can count the same thing by forming the sub-committee first and then forming the committee that contains the sub-committee. Given $n$ people we can form a sub-committee of size $k$ in ${n\choose k}$ ways. Once the sub-committee is formed we must form the committee of size $n-m$ from the remaining $n-k$ people in ${n-k\choose n-m}$ ways. Thus we can form a sub-committee of size $k$ while forming the committee of size $n-m$ that contains the sub-committee in ${n\choose k}{n-k\choose n-m}$ ways. Hence ${n\choose m}{m\choose k}={n\choose k}{n-k\choose n-m}$.
This combinatorial identity is known as the Subset-of-a-Subset identity.
Now, we must show that $${n\choose 0}+{n\choose 1}+{n\choose 2}+\cdots +{n\choose n}=2^n$$ is the number of subsets of an $n$-element set $S$ where $n\geq0$.
Every subset of $S$ is an $i$-subset of $S$ where $i=0,1,2,...,n$. We know that ${n\choose i}$ equals the number of $i$-subsets of S. Thus by the Addition Principle $${n\choose 0}+{n\choose 1}+{n\choose 2}+\cdots +{n\choose n}$$ equals the number of subsets to the set $S$. We can count the same thing by observing that each element of the set $S$ has two choices, either they are in a subset or they are not in a subset. Let $S=\{x_1,x_2,x_3,...,x_n\}$. So, $x_1$ is either in a subset or it is not in a subset, $x_2$ is either in a subset or it is not in a subset,..., $x_n$ is either in a subset or it is not in a subset. Thus by the Multiplication Principle there are $2^n$ ways we can form a subset of the set $S$. Hence ${n\choose 0}+{n\choose 1}+{n\choose 2}+\cdots +{n\choose n}=2^n$.
Another approach is to consider the Binomial Theorem $$(x+y)^n=\sum_{i=0}^n {n\choose i}x^{n-i}y^k.$$ Letting $x=1$ and $y=1$ we obtain$$2^n=\sum_{i=0}^n{n\choose i}.$$