Introduction to Business Environment

Introduction to Business
Environment

Table of Content
 Introduction
 Monetary policy
 Fiscal policy
 Global factors
 Regional factors
 Conclusion
 References

Introduction
Business environment refers to sum total of internal and
external factors which influence on business. Business
environment can consist factors like suppliers, consumers,
competition, improvement in technology, government
activities etc. It is helpful in determining the business
opportunities, helpful in planning, increase profitability,
make improvement in overall performance etc.

Monetary Policy
 It refers to process
through which monetary
authority of country like
currency board, central
back etc. assure the
stability in price as well
as trust in currency.

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 It is macroeconomic policy that is laid down through
central bank.
 The monetary policy is mainly used through government
in order to regulate money flow in an economy.
 Main objective of monetary policy is to minimize
demand for services and products.

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Impact of high interest rates
 Usually, Central bank enhance the interest rates when
inflation is to be predicted to enhance in inflation target.
 The higher interest rates tend to minimize inflationary
pressures and rate of the economic rates.

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 At the time of high investments, firms can earn the more
money from these kinds of investments.
 The enhancing interest rates can develop the high affect
on the several business due to demand of the credit goes
down and also the customers switch to saving the
money to spending it.

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Impact of Monetary policy on Investment
 Monetary policies is related to strategies which employed
through central bank with regard to money that
circulation in an economy.
 The main aim of the monetary policy is to attain the long
term economic development and the central banks may
have the various stated objectives towards end.