Question

Following is a list of external factors that affect the macro environment of the business. Identify the elements that are part of the economic environment.

1. level of education of the population
2. interest rates on loans
3. unemployment rates
4. efficiency of the existing available machines

Options

• (i) and (ii)

• (ii) and (iii)

• (iii) and (iv)

• (i) and (iv)

Answer 1

(ii) and (iii)

Explanation:

The economic environment includes factors that influence a country’s economic conditions and business performance, such as interest rates, inflation, income levels, and employment rates. Hence, interest rates on loans (ii) and unemployment rates (iii) are part of the economic environment, while (i) and (iv) relates to social and technological environments, respectively.