under in this slide discuss about the economic environment, condition, policies etc..........

1. Manish Sharma
1
Business
Environment

2. Economic Environment
2
Economic environment include the economic factors only
and it consist of both national and international factors.
Economic conditions, economic policies, economic systems,
global environment etc. are part of economic environment of
business.

3. Economic Condition
3
• Economic condition reflects the current status of the
economy in terms of prices, aggregate demand, aggregate
supply, investment, saving, consumption, employment etc.
• Recession, depression, recovery, boom are different type of
economic condition.

4. Economic Policies
4
Economic policies of the government can have a great impact on
business.
Industrial policy, trade policy, foreign exchange policy, monetary
policy, foreign investment policy, fiscal policy etc. are some of the
important economic policies.

5. Economic systems
5
Economic system determines the framework within which
major decisions are taken in the economy. It decides the role
of individuals, market and the government.
There are three major types of economic system- free
market economy or capitalism, planned economy or
communism, mixed economy.

6. Capitalism or free market economy
6
The main characteristics of capitalism are
Private ownership of means of production
Freedom of enterprise
Profit motive
Competition and active entrepreneurship
Limited role of government
Absence of central plan

7. Planned economy or communism
7
• Key features of communism are
• Public ownership of means of production
• Planning authority
• Economic equality and classless society
• Prices and Quantities to be produced are determined by
government
• Social welfare is the motive of the government
• State is the final arbiter of all issues

8. Mixed economy
8
In mixed economy we see the coexistence of both private
sector and public sector.
Government controls and regulate the private sector
Resource allocation is through the price system and
government directions
Welfare of poor is taken care by the government

9. Examples
9
Capitalism – USA, Canada, Western Europe etc.
Communism – Cuba, North Korea, Erstwhile USSR etc.
Mixed economy – India, Poland etc.

10. Examples
9
Capitalism – USA, Canada, Western Europe etc.
Communism – Cuba, North Korea, Erstwhile USSR etc.
Mixed economy – India, Poland etc.