There are many factors which effect the economic environment, factors such as Growth because more goods are being produced and consumed due to higher demands for products and services. Recession impacts the economic environment because in the time of recession income is low. This means people will be cautious on what they spend their money on. Labour also has a major effect because the more people that are working the better the economy. It means people can afford to purchase items allowing businesses to stay open and allow economic growth. If more people are unemployed they are unable to spend alot of money causing the economy to go into recession and undoing the economic growth. Spending power increase means the economy is generating more income. The term business environment implies to external forces, factors and institutions that are beyond the control of an individual business organization. GDP (Gross domestic product) is measured by the average income – the availability of goods and services produced within the company. If GDP falls it shrinks the economy e.g house prices decrease but if GDP rises it allows the economy to grow in affect house prices increase. 3 popular companies that are not UK based would include:
* Apple which is based in USA
* Samsung based in China
* HSBC based in Hong Kong
3 popular UK based companies are:
* Aston martin
The four elements of a business cycle are slum, recovering, boom and recession Employment effects the economic environment because it means more people are generating income which can then be used to purchase items that help businesses stay open. If the number of employment decreased more business would be out of pocket and then be forced to shut down. Stability is very important because it allows businesses to create short to medium term plans as a prediction for their existing products. This helps them make a projection for the businesses future and allows them to...