Which of the following is an example of an economic factor in a firm's general environment?

• A. Employee training programs
• B. Company management style
• C. Interest rates
• D. Advertising campaigns

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of a firm's general environment in microeconomics. The general environment includes broad external factors that affect all firms in the economy, such as economic, technological, sociocultural, and political-legal forces.
2. Step 2: Identify what constitutes an economic factor. Economic factors typically include elements like interest rates, inflation, unemployment rates, and overall economic growth, which influence a firm's operations indirectly through the broader economy.
3. Step 3: Analyze each option to determine if it is an economic factor in the general environment: Employee training programs and advertising campaigns are internal or task environment factors, as they relate directly to firm operations; company management style is an internal organizational factor.
4. Step 4: Recognize that interest rates are an economic factor because they are part of the macroeconomic environment affecting borrowing costs, investment decisions, and overall economic activity, which impacts all firms.
5. Step 5: Conclude that among the given options, interest rates best represent an economic factor in the firm's general environment.