Chapter 1 QUESTIONS and Answers
Chapter 1: Economic Environment – Questions & Answers 📌 Part A – 1 Mark Questions (Very Short Answer) What is economic environment? Economic environment refers to all the economic factors like inflation, employment, government policies, interest rates etc. that affect business in a country. What is an economic system? An economic system is the way a country produces and distributes goods and services to satisfy people's needs. What is capitalism? Capitalism is an economic system where production and distribution are privately owned and run for profit. Example: USA, UK. What is socialism? Socialism is an economic system where the government owns and controls production and distribution. Example: China, Cuba. What is a mixed economy? Mixed economy has both private and government sectors working together. Example: India. Monetary policy is also called ________. Credit control policy. What does GDP stand for? Gross Domestic Product. Write the formula for GNP. GNP = GD...