Economic Environment of Business

Why do businesses not want a strong pound?

• Their imports are cheaper

• Their exports are more expensive

• Their exports are cheaper

• Their imports are more expensive

Why do businesses not want a weak pound?

• Their imports are cheaper

• Their exports are more expensive

• Their exports are cheaper

• Their imports are more expensive

Gross national product, inflation, interest rates, and unemployment rates are included in a firm's

• social environment.

• economic environment.

• political environment

• technological environment

The collection of private, commercially oriented organizations, ranging in size from sole proprietorships to large corporations is referred to as

• the third sector

• government

• business

• the free market economy

What are the two Es in the acronym PESTLE?

• Enterprise and Environment

• Environment and Education

• Economic and Enterprise

• Economic and Environmental

Economic growth is good for most businesses because

• Inflation raises the cost of production

• Interest rates rise and more saving takes place

• Rising incomes means higher consumer spending

• Higher levels of tax will be paid

An economic system in which citizens can be entrepreneurs and business owners. The government does not control the industry or the business.

• Socialism

• Communism

• Free Market/Capitalism

• Traditional

What is the primary focus of the economic environment of a business?

• A) Social welfare

• B) Market conditions

• C) Political stability

• D) Technological advancements

Which of the following is a component of the economic environment?

• A) Cultural trends

• B) Inflation rates

• C) Legal regulations

• D) Technological innovations

How does a high inflation rate affect businesses?

• A) Reduces production costs

• B) Increases purchasing power

• C) Decreases consumer spending

• D) Stabilizes currency value