1. Economic Environment (Macro)
Fundamental Learning Objectives
Identify the macroeconomic factors that affect business performance
Explain how market prices are determined
Explain how the government influences economic conditions

2. Economic Growth The change in the general level of economic activity

3. Demand-Pull Inflation
Inflation the increase in the general level of prices of products and services over a specified period of time
Measured by the
Cost-Push Inflation
Demand-Pull Inflation

4. Interest Rates the cost of borrowing money
Affect a firm’s Expenses:
Affect a firm’s Revenue:

5. Demand and Supply What is demanded by customers or supplied by producers based on PRICE
CHANGE in S or D
Determination of MARKET PRICE:

6. Market Price Influences

7. Government Influence: Monetary Policy
What is Monetary Policy?
Interest Rates

8. Government Influence: Fiscal Policy
What is Fiscal Policy?

9. Economic Environment
Macroeconomic factors that affect business performance include:
Market prices are determined by:
The government influences economic conditions through:

10. Industry Environment (Micro)
Identify the industry characteristics that influence business performance
Explain why some firms are more exposed to industry conditions
Explain how a firm can compete within its industry

11. Business Performance is dependent upon industry characteristics

12. Industry Exposure
Reducing Exposure -

13. Competing Within an Industry

14. Industry Environment (Micro)
Industry characteristics that influence business performance include:
Some firms are more exposed to industry conditions because of their:
Firms can compete within their industry by:

15. Global Environment (Global)
Explain why US firms engage in international business
Describe how firms conduct international business
Explain how foreign characteristics can influence a firm’s international business
Explain how exchange rate movements can affect a firm’s performance

16. Why Engage in Int’l Business?

17. Conducting International Business

18. Foreign Characteristics that Influence International Business

19. Exchange Rate Movements Affect Business Performance

20. Global Environment (Global)
US firms may engage in international business to:
Firms conduct international business through:

21. Global Environment (Global)
Foreign characteristics that can influence a firm’s international business include:
Exchange rate movements can affect performance

22. Forms of Business Ownership
New business owners choose from the following general forms of business ownership:
Existing businesses can be owned by:
Business Performance is measured by:

23. Planning a Business
The Primary Stakeholders are:

24. Planning a Business The Key Functions of a Business include:
To Develop a Business Plan include: