Considering the economic environment of a business, the components are:

(A) Life expectancy
(B) Inflation
(C) Interest Rate
(D) Consumption Habits
(E) Disposable Income

Choose the correct answer from the options given below:

(B), (C) and (E) only

The correct answer is option 3- (B), (C) and (E) only.

(A) Life expectancy- Social environment

(D) Consumption Habits- Social 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. Some components of economic environment-

* Existing structure of the economy in terms of relative role of private and public sectors.

* The rates of growth of GNP and per capita income at current and constant prices

* Rates of saving and investment

* Volume of imports and exports of different items

* Balance of payments and changes in foreign exchange reserves

* Agricultural and industrial production trends

* Expansion of transportation and communication facilities

* Money supply in the economy

* Public debt (internal and external)

* Planned outlay in private and public sectors