Name any two factors of economic environment of the business.

1.	Name any two factors of economic environment of the business.
Answer» Example of Impact of Economic Environment on Business:- (i) In case of construction companies and automobile manufactures, low long-term interest rates are beneficial because they result in increased spending by consumers for buying homes and cars. (ii) Increase in the incomes of the consumers leads to increase in their purchasing power. Hence, demand for goods and services rises. (iii) High inflation rates generally result in constraints on business enterprise because they increase the costs of raw materials or machinery and payment of wages & salaries to employees.

Answer»

Example of Impact of Economic Environment on Business:-

(i) In case of construction companies and automobile manufactures, low long-term interest rates are beneficial because they result in increased spending by consumers for buying homes and cars.

(ii) Increase in the incomes of the consumers leads to increase in their purchasing power. Hence, demand for goods and services rises.

(iii) High inflation rates generally result in constraints on business enterprise because they increase the costs of raw materials or machinery and payment of wages & salaries to employees.

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