What are the Key Components of Economic Environment?
Several key components make up the economic environment:
Economic Conditions: These include the overall health of the economy, characterized by factors such as GDP growth rate, unemployment rate, and inflation rate. Fiscal Policy: Government spending and taxation policies that influence economic activity. Monetary Policy: Central bank actions that influence the amount of money in circulation and interest rates. Interest Rates: The cost of borrowing money, which can affect both consumer spending and business investment. Exchange Rates: The value of a country’s currency relative to others, impacting international trade.