Welcome

Topic :

ECONOMIC ENVIRONMENT

Submitted By:

BENSHA C SHAJI HAFIZ SAIF SUMANT KUMAR CHARAN NAIK

In this topic we are going to discus about the following sections; a) What is Economicb) What is Environmentc) Structure of Economyd) Various Environment Factorse) Features of Economic Environmentf) Components of Economic Environmentg) Elements of Economic Environmenth) Classification of Economic Environmenti) Factors Affecting Economic Environmentj) Objectives of Economic Environment

“Man is a Social Animal” Aristotle

Born, brought up and and live until 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 Natural

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, operationsand growth of an organization is called Environment

Economic EnvironmentThose 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 EconomyIn modern economic phases are somewhat differentlyexpressed by 4 degrees of activity.

Primary StageSecondary StageTertiary StageQuaternary Stage

1. Primary StageIt involves the extraction and production of raw materials such as corn, coal, wood and iron.

2. Secondary StageIt involves the transformation of row or intermediate materials into goods.

3. Tertiary StageIt involves the provision of services to consumers and businesses such as baby-sitting,cinema and banking.

4. Quaternary StageIt involves the research and developmentneeded to products from natural resources and their Subsequent by-products.

Note : Education is sometimes include in quaternary stage

Various Environment Factors Such as ;1. Economic 2. Socio-cultural3. Political4. Technological5. Demographic 6. International

Affect the business and its Working. out of These factors economic environment is 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 disguised unemployment.

Productivity : This is the output generated from a given amount of inputs. High levels of productivity supports the economic environment

Elements of Economic Environment

Economic ConditionsEconomic SystemsEconomic Policies International/Global EnvironmentEconomic Legislations

It has five main components

Classifications of the Economic Environment

Micro MacroMicro 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 EnvironmentThe Economic Environment of a nation as well as the world is impacted by ;A. Inflation and Deflation

B. Interest RatesC. Exchange RatesD. 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 :

ECONOMIC ENVIRONMENT

CONCLUSION

Thanks All

THE END