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While using and managing a firm's internal environment can totally consume a manager's time and effort,changes in the firm's external environment can create opportunities and/or roadblocks.What are the five components of a firm's external environment they need to monitor?
Nominal Interest Rate
The percentage increase in money you pay the lender for the use of the money you borrowed, not adjusted for inflation.
Real Interest Rate
The interest rate adjusted for inflation, reflecting the real cost of borrowing and the real yield on savings.
Purchasing Power
The value of a currency expressed in terms of the quantity of goods or services that one unit of money can buy, often influenced by inflation.
Consumer Price Index
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, often used as an indicator of inflation.
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