Read the following passage and answer the question.

The governments all over the world are becoming more and more cautious towards the environment. To ensure it, many state governments passed an order to ban polythene bags since these are non-biodegradable. As a result, the government also decided to give a subsidy to jute industry (bags). The minister said in the statement that they believe it will be helpful as incomes of people are rising and people can afford jute bag. After this subsidy, Pooja saw great potential in jute multi-pocket bags business which was not established yet in India but had been flourishing in USA where she studied during her post graduation. She launched the product in India and her business started to boom. So, more companies entered into the market with other articles and improvisations in the country.

Which business dimension is reflected when it is said that income of people are rising and people can afford jute bags?

Economic

The correct answer is option 2- Economic.

When it is mentioned that "incomes of people are rising and people can afford jute bags," the dimension of the business environment being reflected is the economic environment.

Economic Environment- Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise. Short and long term interest rates significantly affect the demand for product and services. A rise in the disposable income of people due to increase in the gross domestic product of a country creates increasing demand for products. High inflation rates generally result in constraints on business enterprises as they increase the various costs of business such as the purchase of raw materials or machinery and payment of wages and salaries to employees.