Welco M e

Welco
m e
Topic
:
ECONOMIC
ENVIRONMEN
Submitted By:

T
BENSHA C SHAJI
 HAFIZ SAIF
 SUMANT
KUMAR
In this topic we are going to discus about the following
section
a) What is Economic
b) What is Environment
c) Structure of Economy
d) Various Environment Factors
e) Features of Economic Environment
f) Components of Economic Environment
g) Elements of Economic Environment
h) Classification of Economic Environment
i) Factors Affecting Economic Environment
“Man is a Social
Animal”
Born, brought up and and live untilAristotle
death in society.
Performs economic activities to satisfy his unlimited
needs with limited resources which have alternative
uses.
Human life is influenced by many environmental factors;
 Economic
 Social
 Political
 Cultural
 Religious
What is
ECONOMIC ??.....
ECONOMIC means
“Pertaining to the production and
use of income”.
Main Economic Activities : Money earning and Spending

What is
ENVIRONMENT ??........
Circumstances, Influences, Economic,
Natural,
Political, Regulatory and Technical
factors that effects the survival,
operations and growth of an
organization is called
Environment
Economic
Environment
Those economic factors which have their
affects on the working of the business is
known as Economic Environment.
It includes system, policies and nature of an

economic trade cycles, economic resources
Level
in income, distribution of income and wealth
etc…..
The economic environment represents the
economic conditions in the country where
the international organization operates.
Economic environment refers to the aggregate

of the nature of economic system of the
country
Business cycle the socio-economic
infrastructure etc…
Economic Environment is very dynamic
and complex in nature. It does not
remain the same. It keeps on changing
from time to time which the changes in
an economy
like in Govt. policies, political situations
etc……
Structure of
Economy
In modern economic phases are somewhat
differently expressed by 4 degrees of activity.
Primary Stage
Secondary Stage
Tertiary Stage
Quaternary Stage
1. Primary
Stage
It involves the extraction and
production of raw materials such as
corn, coal, wood and iron.
2. SecondaryStage
It involves the transformation of row
or intermediate materials into goods.
3. Tertiary
Stage
It involves the provision of services to
consumers and businesses such as baby-
sittin cinema and banking.
4. Quaternary Stage
It involves the research and development
needed to products from natural
resources and their Subsequent by-
Note
: Education is sometimes include in quaternary
stage
Various Environment Factors Such
as ;
1. Economic
2. Socio-cultural
Affect the business and its
3. Political Working. out of These
4. Technological factors economic
5. Demographic environment is
6. International
the Most important factor.
Features Of Economic
Environment
• Directly related with economic activities
• Impact of non economic factors
• Impact of basic infrastructure
• Impact of ideology of the people
• Availability of capital
• Economic disparities
• Economic planning
• Public morality
• Ideology of the Gotland economic system
• Directives of the Govt.
Components of Economic
Environment
Income and Wealth : Income in an economy is
measured by GDP,GNP, and Per Capita Income. High
values of
these factors shows a progressive economic
environment.
Employment levels : High employment represents a

positive picture of the economy. However there are many
forms
of unemployment including partial employment and
Productivity : This is the output generated
from a given amount of inputs. High levels
of
productivity supports the economic
environment
Elements of Economic
Environment
It has five main components
Economic Conditions
Economic Systems
Economic Policies
International/Global
Environment
Economic Legislations
Classifications of the Economic
Environment
Micro Economic : It includes the economic environment

of a particular industry firm or household and its
primarily concerned with price determination of
individual factors .
The main consideration from a microeconomic perspective
is the efficient allocation of resources. This is necessary
to maximize total output.
Macro Economic : It includes all the economic factors
totality. The main consideration here is the
determinations of the level of income and employment
in the economy.
Over the course of the 20th century the focus

has shifted from cities and countries to the
global economy being the chief economic
unit
Factors Affecting the
Economic
Environmen
The Economic Environment of a nation as well as the
tworld
is impacted by ;
A. Inflation and Deflation
B. Interest Rates
C. Exchange Rates
D. Monetary and Fiscal policy
Interest Rates :
It determines the lost of borrowing and the
flow of money towards business.
Exchange Rates :
This impacts the price of imports the
profits made by exporters and investors
and employment levels.
Monetary and Fiscal policy :
This helps in attaining full employment price
stability and economic growth.
The economic environment is also influenced

by various political, social and technological
factors. These include a change in Govt. and
the
development of the new technology and
business tools.
Objectives of Economic
Environment
 Proper functioning of an economy
 Knowledge of new opportunities and
resources
 Study of environmental factors
 Removal of obstacles and challenges
 Optimum use of environment
 Minimizing ill effects
Topic
:
ECONOMI
C ENVIRONMENT
CONCLUSIO
N
THE END
Thanks

Welco M e

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Human life is influenced by many environmental factors;

Main Economic Activities : Money earning and Spending

It includes system, policies and nature of an

Economic environment refers to the aggregate

Employment levels : High employment represents a

Micro Economic : It includes the economic environment

Over the course of the 20th century the focus

The economic environment is also influenced

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