Question

1. what are some factors that constitute the economic environment for Nissan.

2. Explain why it is important to understand when markets are at different stages of economic development.

3. Explain how the World Bank’s four-category classification system, which measures gross national income (GNI), adds value to an organization.

Answer 1

Following factors constitute the economic environment of NISSAN

• Government economic policy.
• Diesel technology
• Rate of interest set by the central bank of any country
• Privatization policy by the government.
• Instability in the economy due to bad political conditions in the country affects the business environment.
• Shipping charges
• Foreign investments(NISSAN depends on the overseas market)

It is important to understand different stages of economic development because-

• It helps investors to analyze whether financial conditions are up to the mark of economic development or not. and this information helpful for investors in a way of making investments and asset allocation decisions.
• It indicates the growth in economic output measured by GDP or GVA.
• It helps investors what factors derive an economy.

Four measured classifications of world bank (calculate GNI)' add value to an organization

Four-category classification in terms of income include-

1. High-income group
2. Upper-middle-income group
3. Lower-middle-income group
4. Low-income group

They add value to an organization by investing and adding into the production process. The spending behavior determined by the income of that group and which directly added to the value of an organization.

EXAMPLE=By adding value to an organization we mean the difference between the price of finished product and services and cost of input involved. Expensive and high category goods are purchased by elite society i.e high-income groups and then add value to an organization. The middle-class group caters to maximum market demand and then adds value to an organization. Low-income groups help in the production of any firm and add value to that organization.

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