Answer question based on following case study.

Mr. Rajan wants to start a new business. Before starting new business he made an analysis and found various external and uncontrollable forces which affect individual enterprise directly and indirectly. Because these forces keep on changing, it is difficult to predict future happenings. Some examples of these forces are growth rate of GDP, consumption habits, expansion of communication facilities etc.

'Expansion of Communication Facilities' is a component of:

Economic Environment

The correct answer is Option (1) - Economic Environment.

Expansion of communication facilities related with a large investment to boost economy.

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. 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