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Economic Environment (Macro)

Economic Environment (Macro). Fundamental Learning Objectives Identify the macroeconomic factors that affect business performance Explain how market prices are determined Explain how the government influences economic conditions.

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Economic Environment (Macro)

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  1. Economic Environment (Macro) Fundamental Learning Objectives • Identify the macroeconomic factors that affect business performance • Explain how market prices are determined • Explain how the government influences economic conditions

  2. Economic GrowthThe change in the general level of economic activity

  3. Inflationthe increase in the general level of prices of products and services over a specified period of time • Measured by the • Cost-Push Inflation • Demand-Pull Inflation

  4. Interest Ratesthe cost of borrowing money • Affect a firm’s Expenses: • Affect a firm’s Revenue:

  5. Demand and SupplyWhat is demanded by customers or supplied by producers based on PRICE • Demand: • Supply: • CHANGE in S or D Determination of MARKET PRICE:

  6. Market Price Influences

  7. Government Influence: Monetary Policy • What is Monetary Policy? • Interest Rates • Interest Rates

  8. Government Influence: Fiscal Policy • What is Fiscal Policy?

  9. Economic Environment • Macroeconomic factors that affect business performance include: • Market prices are determined by: • The government influences economic conditions through:

  10. Industry Environment (Micro) • Identify the industry characteristics that influence business performance • Explain why some firms are more exposed to industry conditions • Explain how a firm can compete within its industry

  11. Business Performance is dependent upon industry characteristics

  12. Industry Exposure • Reducing Exposure -

  13. Competing Within an Industry

  14. Industry Environment (Micro) • Industry characteristics that influence business performance include: • Some firms are more exposed to industry conditions because of their: • Firms can compete within their industry by:

  15. Global Environment (Global) • Explain why US firms engage in international business • Describe how firms conduct international business • Explain how foreign characteristics can influence a firm’s international business • Explain how exchange rate movements can affect a firm’s performance

  16. Why Engage in Int’l Business?

  17. Conducting International Business

  18. Foreign Characteristics that Influence International Business

  19. Exchange Rate Movements Affect Business Performance

  20. Global Environment (Global) • US firms may engage in international business to: • Firms conduct international business through:

  21. Global Environment (Global) • Foreign characteristics that can influence a firm’s international business include: • Exchange rate movements can affect performance

  22. Forms of Business Ownership • New business owners choose from the following general forms of business ownership: • Existing businesses can be owned by: • Business Performance is measured by:

  23. Planning a Business • The Primary Stakeholders are:

  24. Planning a Business • To Develop a Business Plan include: • The Key Functions of a Business include:

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