CHAP 4: THE ECONOMIC ENVIRONMENT FACING THE BUSINESS

ECONOMIC SYSTEMS AND IB

Principles to assess economic environments
- System complexity
- Market dynamism
- Market interdependence

Types of economies
- Developed
- Developing
- Countries in transition

Economic freedom “absolute right of property ownership, fully realized freedoms of

movement for labor, capital, and goods, and an absolute absence of coercion or
constraint of economic liberty beyond the extent necessary for citizens to protect
and maintain liberty itself.”
-> measure by EFI

- Market economies
- Command economies
- Mixed economies

Way to measure an economy: GDP, GNI (Gross national income), GNP (Gross
national product)

Sustainability in economies
- Green economies
- Sustainability
+ Net national product (
- Happy indicator