In
order to estimate the dynamics of business environment as to know about all the
macro environmental factors we have to know about the indicators and trends by
which we can tackle all the problem and can know overall state of the economy,
these indicators and trends are known as economic indicators and trends.
Economic indicators:
(1)GDP: Gross Domestic Product stands for GDP. GDP is the measurement of total market value of all final goods & services produced annually within a country's boarder.
a)Nominal GDP: It is the value of total flow of goods & services produced in an economy over a specified period of time at current market price.
b)Real GDP: It is the physical quantity of goods & services produced in a year.
(2)Money supply: The supplied amount of fund of commercial bank is known as money supply. Money supply increase and decrease on the basis of necessity. Mainly it is done for controlling the economy.
(3)Inflation: Any increase in the general price level is called inflation.
a)Hyper inflation: when there exist extreme inflation i.e. 100% rated inflation
b)Creeping inflation: When inflation occurs in gradual rate.
(4)Balance of payment: Balance of payment(BOP) is the statement of international transaction. BOP is stated by determining the negative balance of trade & the positive balance of trade.
when import>export= negative b.o.t
while, export>import= positive b.o.t
(5)Economic policy: The policies which are essential for determining the economic environment is known as economic policy. They are classified under:
a)Fiscal policy: It is the statement of governments expenditure and transfer of fund over a specified time(year). Expenditure includes: Purchase of raw materials, construction of roads, buildings etc & fund transfer includes: pension, gratuity etc.
Another instrument of fiscal policy is taxation. It has two sided effect in the economy. Changes in tax structure direct has impacts on individuals and entities disposable income. Lower amount of tax encourage the business man to invest more.
b)Monetary policy: The monetary policy is formulated and implemented by the central bank of a country to influence the economy.
Mainly the objectives are: to maintain price stability and to ensure sufficient flow of credit to support the economy.
c)Industrial policy: Industrial policy refers to those policies which states the way of deriving the business in the industrialize form.
d)International trade policy: The combination of export & import policy is known as international trade policy. These policies determines the rules of export & import related issues.
(6)Business cycle: The business cycle is the more or less regular pattern of expansion & contraction in economic activity around the path of trend growth.
It usually indicates the prosperity and recession of an economy through four indicators: employment, industrial production, sales, personal income.
Prosperity: When all the indicators prevails in increasing position, then the economy is in expansion
Recession: When all the indicators prevails in decreasing position, then the economy is in recession.
Economic indicators:
(1)GDP: Gross Domestic Product stands for GDP. GDP is the measurement of total market value of all final goods & services produced annually within a country's boarder.
a)Nominal GDP: It is the value of total flow of goods & services produced in an economy over a specified period of time at current market price.
b)Real GDP: It is the physical quantity of goods & services produced in a year.
(2)Money supply: The supplied amount of fund of commercial bank is known as money supply. Money supply increase and decrease on the basis of necessity. Mainly it is done for controlling the economy.
(3)Inflation: Any increase in the general price level is called inflation.
a)Hyper inflation: when there exist extreme inflation i.e. 100% rated inflation
b)Creeping inflation: When inflation occurs in gradual rate.
(4)Balance of payment: Balance of payment(BOP) is the statement of international transaction. BOP is stated by determining the negative balance of trade & the positive balance of trade.
when import>export= negative b.o.t
while, export>import= positive b.o.t
(5)Economic policy: The policies which are essential for determining the economic environment is known as economic policy. They are classified under:
a)Fiscal policy: It is the statement of governments expenditure and transfer of fund over a specified time(year). Expenditure includes: Purchase of raw materials, construction of roads, buildings etc & fund transfer includes: pension, gratuity etc.
Another instrument of fiscal policy is taxation. It has two sided effect in the economy. Changes in tax structure direct has impacts on individuals and entities disposable income. Lower amount of tax encourage the business man to invest more.
b)Monetary policy: The monetary policy is formulated and implemented by the central bank of a country to influence the economy.
Mainly the objectives are: to maintain price stability and to ensure sufficient flow of credit to support the economy.
c)Industrial policy: Industrial policy refers to those policies which states the way of deriving the business in the industrialize form.
d)International trade policy: The combination of export & import policy is known as international trade policy. These policies determines the rules of export & import related issues.
(6)Business cycle: The business cycle is the more or less regular pattern of expansion & contraction in economic activity around the path of trend growth.
It usually indicates the prosperity and recession of an economy through four indicators: employment, industrial production, sales, personal income.
Prosperity: When all the indicators prevails in increasing position, then the economy is in expansion
Recession: When all the indicators prevails in decreasing position, then the economy is in recession.
