ADMS 1000 Lecture Notes - Lecture 6: Market Basket, High Standard Manufacturing Company, Deflation
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An economic environment refers to the economic condition in which an organization operates. An economic condition or variable can include job growth, consumer confidence, interest rates and much more. Three key groups that make up an economic environment: individuals: individuals decide how to spend their money and on what. Since, money is a limited resource an individual is forced to make spending choices: businesses: in order for businesses to make profit, managers must balance the right combinations of input that allow efficiency, productivity and overall firm growth. The government is also responsible for making laws, regulations and policy to manage the country"s economy. Analyzing the economy: two approaches: microeconomics: is a study of smaller components of economy such as individuals and businesses (analyze consumer demand and existing suppy), macroeconomics: study of larger economic issues involving the economy as a whole.