CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
Which of the following is best described as a component of the economic environment of a business rather than its social environment?
The prevailing rate of inflation is a component of the economic environment. Economic environment includes inflation, interest rates, income distribution and fiscal or monetary policy, whereas consumer attitudes, religious customs and literacy relate to the social and cultural environment of a business.
- AConsumer attitudes toward family size
- BPrevailing rate of inflation in the countryCorrect
- CReligious customs of the local population
- DLiteracy level of the workforce
Explanation
The economic environment covers factors like inflation, interest rates, income levels and the fiscal and monetary stance. Attitudes, customs and literacy are social or cultural factors. So the inflation rate is the only economic factor listed.
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