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Business Environment

• A business environment is the social, technological, economic and political environment in which a business functions. The business environment affects organizational decisions, strategies, processes and performance of the Business.

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Environmental InfluencesPEST

– Political environment » Government actions » Legislation

– Economic environment » Global economy (Macroeconomics) » Local economy (Microeconomics)

– Social Environment » Labor market » Competition

– Technological Environment » Technical Development» Skilled Human Resources

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Macroeconomics

• The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation and price levels.

• Study of the Micro-economic behaviour of individual consumers, firms, and industries and the distribution of total production and income among them. It considers individuals both as suppliers of land, labour, and capital and as the ultimate consumers of the final product, and it examines firms both as suppliers of products and as consumers of labour and capital. Microeconomics seeks to analyze the market or other mechanisms that establish relative prices among goods and services and allocate society's resources among their many possible uses..

• The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets (e.g. Chicken & Egg industry in Brunei).

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Macroeconomics • The branch of economics which deals with aggregates such as

capital and labour, and their interactions in an economy as a whole. Politics everywhere is deeply affected by changes in macroeconomic variables such as inflation, unemployment, and the exchange rate. Some writers have developed ‘political business cycle’ models which aim to predict the popularity of the government from the current or recent (‘lagged’) values of these variables

• Macroeconomics, on the other hand, looks at the big picture (hence "macro"). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world. For example, people who study this branch of economics would be able to interpret the latest Gross Domestic Product figures or explain why a 6% rate of unemployment is not necessarily a bad thing. Thus, for an overall perspective of how the entire economy works, you need to have an understanding of economics at both the micro and macro levels.

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Monetary Policy & Economic Development

• Monetary Policy • The actions of a central bank, currency board or other regulatory committee, that

determine the size and rate of growth of the money supply, which in turn affects interest rates.

• Economic Development • Economic development, generally speaking, is a process of change that is focused

on the betterment of the community, state, and/or nation. Defining economic development can be difficult. The first term in this phrase—"economic"—refers to an accepted paradigm for organizing the business and financial and even to some extent the governmental sectors of a nation. Economics is viewed as the foundation for building a prosperous society. However, it is the second term—"development"—over which there is considerable debate. People's perceptions of development vary. For some, development has the appearance of successful commercial enterprise; for others, the face of development is one of economic equality. Nevertheless, the concept of "economic development" has the attention of government, the business sector, and the citizenry. We pursue economic development as one of the goals of a successful country, state, or city. It captures the attention of the news media and impacts, as well as is impacted by, political objectives.