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BUSINESS ENVIROMENT — OCM STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceOCMBUSINESS ENVIROMENT5 Marks
Question
Explain in brief economic factors affecting business environment.
✓

Answer

Introduction :
  • Among all external factors affecting business environment, economic factors is considered of great importance.
  • Economic factors are considered in formulating policies for development and to maintain continuity of daily activities of business.
  • It is highly required for development of business to evaluate.
  • Economic factors affecting business environment :
  • Economic specialties and limitations of the nation or society affect business decisions.
  • The level and form of the development of business depend on the following economic factors.
  • Economic system :
  • Economic system plays vital role in determining economic activities of the nation.
  • If capitalist economic system is adopted, it means ‘free trade’ policy is adopted.
  • Under this system manufacturers are at liberty to take all decisions related to economic activity.
  • In this type of economy government interference is less.
  • Most of the decisions are taken by the government in socialist economy.
  • Individual motivation or encouragement is not found in such type of economy.
  • As India has adopted ‘mixed’ economy, business freedom is observed in some sectors and in other sectors government dominance is observed

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