Answer to Question #23063 in Finance for andrew

Question

When a local bank in Kansas City makes loans to its small business customers, it charges them an interest rate for borrowing money. Interest rates are part of the ____________ environment.
Question 19 options:
cultural and social
economic
legal
political
competitive

Answer 1

When a local bank in Kansas City makes loans to its small business
customers, it charges them an interest rate for borrowing money.
Interest rates are part of the economic environment.

Meaning of Economic Environment:- Those Economic factors which have their affect on the working of the business is known economic environment. It includes system, policies and nature of an economy, trade cycles, economic resources, level of income, distribution of income and wealth etc. Economic environment is very dynamic and complex in nature. It does not remain the same. It keeps on changing from time to time with the changes in an economy like change in Govt. policies, political situations.