Economic Environment

The most significant of all the external forces with which a business firm must contend is the economic environment of the country. The general economic conditions and trends are crucial to the success of a business firm. How the scarce resources of land, labor, and capital are being allocated to the production and distribution of goods and services and the manner in which they are consumed are of paramount important to managers. To keep abreast of the latest developments and also plan for the future, business firms for many years have been assessing and forecasting the economic conditions at the local, national, and international levels. The structure, composition and trends of the Nepalese economy will be presented and analyzed to draw their relevance to business firms. Gross national product, per capita income, personal consumption expenditure, and personal ownership of goods, private investment, and unit labor costs are the economic dimensions that predict the current position of economic situation of the country which tells about the business environment.