Question

Describe the economic environment of business.

Answer 1

Economic Environment:
Business is an integral part of the economic system prevalent in a country. The multiple variables in the macro-environment system which has a bearing on business include:

• The nature of the economy based on the stage of development and categorized on the basis of growth and per capita income as a developed country (USA) Developing country (India) and underdeveloped country, (Somalia)
• The nature of economic systems can be classified as a capitalistic, socialistic and mixed economy.
• Monetary policy, fiscal policy, industrial policy, trade policy, export-import policy, etc. are the economic environment.
• The economic indices like GDP.GNP, National income, per capita income, etc are an important part of it.
• The organization and development of the monkey market, capital market securities market and, the banking system have a greater impact.
• The Economic structure includes capital formation, investment pattern, the composition of the trade balance, occupational distribution of the workforce, and the structure of the national output.