Why economic environment is important?

The economic environment of a business will play a pivotal role in determining the success or failure of a business. ... If interest rates are too high, the cost of borrowing may not permit a business to expand. On the other hand, if the unemployment rate is high, businesses can obtain labor at cheaper costs.

Explanation:

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The economic environment consists of external factors in a business market and the broader economy that can influence a business. You can divide the economic environment into the microeconomic environment, which affects business decision making - such as individual actions of firms and consumers - and the macroeconomic environment, which affects an entire economy and all of its participants. Many economic factors act as external constraints on your business, which means that you have little, if any, control over them. 

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Explanation:

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