Question

Which of the following is an example of economic environment?

• A. Money supply in economy
• B. Constitution of the country
• C. Life expectancy
• D. Population shifts

Answer 1

The Correct Option is A

Options Analysis

Money Supply in the Economy

Economic Dimension: The money supply is a key economic indicator that affects inflation, interest rates, and overall economic activity. It is directly related to monetary policy and financial markets.

Explanation: The money supply influences economic conditions such as inflation, interest rates, and economic growth. It is a fundamental component of the economic environment.

Constitution of the Country

Legal Dimension: The constitution outlines the fundamental principles and laws governing a country. It sets the framework for the legal system and governance.

Explanation: While the constitution can have indirect economic implications, it is primarily a legal document that defines the structure and powers of government and the rights of citizens.

Life Expectancy

Social Dimension: Life expectancy is a measure of the average lifespan of individuals in a population. It reflects health conditions, living standards, and social well-being.

Explanation: Life expectancy is influenced by social factors such as healthcare, lifestyle, and social policies. It is a key indicator of social development rather than economic conditions.

Population Shifts

Social Dimension: Population shifts refer to changes in the distribution of the population, such as urbanization, migration, or demographic changes.

Explanation: Population shifts can have economic implications, but they are primarily social phenomena that reflect changes in living conditions, employment opportunities, and social policies.

Conclusion

The correct answer is: (1) Money supply in the economy

This is because the money supply is a direct economic indicator that affects key aspects of the economy, such as inflation, interest rates, and economic growth. It is a fundamental component of the economic environment.