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G12

ABM
Applied Economics
QUARTER 4: WEEK 10

CapSLET
Capsulized Self-Learning
Empowerment Toolkit

 
Schools Division Office of Zamboanga City
Region IX, Zamboanga Peninsula
Zamboanga City

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Prepared by: Lucybel R. Arquiza / Teacher I
Manicahan National High School
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CapSLET

Applied Economics
Subject & Grade Applied

Level Economics QUARTER 4 WEEK 10 DAY

12 dd/mm/yyyy
The effects of the various socio-economic factors affecting business and
CONTENT
industry
MOST ESSENTIAL Explain the effects of the various socio-economic affecting business and industry
LEARNING
COMPETENCY

IMPORTANT: Do not write on this material. Write your answers on separate sheets of
paper.

KNOW AND UNDERSTAND

CONTENT STANDARD:
The learner demonstrates an understanding of various socioeconomic impacts of business
on the following sectors: consumers, suppliers, and investors, government, households,
and international trade.

CHECKPOINT: What are the effects of the various socio-economic affecting business and industry?

What is Socio-economic?
 Is the social science that studies how economic activity affects and is
shaped
by social processes.

The Socioeconomic Factors Affecting Business

 The first step to understand what socioeconomic factors are, is to
understand social economics. This is a specialized branch of economics
that concerns itself with studying the intimate relationship between
economics and social behaviour. Such things as ethics, social norms and
different social philosophies have an impact on how consumers behave in
an economy and the eventual shape that economy will take. The study of
social economics seeks to predict what kind of results to expect when the
society has been changed. It does this by studying politics, history and
other social sciences.
 Socioeconomic factors are, therefore, the social and economic factors
that shape and determine the dynamics a society will experience. These
are factors that affect the behavior of a particular group, also known as a
socioeconomic class. Perhaps the most interesting behaviour of members
of a socioeconomic class is their behaviors as consumers. Different
socioeconomic classes will generally have different priorities, and this will

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Manicahan National High School
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affect how they spend their money.

How Do Socioeconomics Factors Affect Business?

 Understand the socioeconomic factors affecting business will help you make better
decisions about the future and direction of your business. To have an intimate
understanding, however, you will have to understand both external and
environmental factors, as well as how their interplay affects your business.
Environmental Analysis
 This is a special term that refers to the process of looking at the external
socioeconomic issues in a business. It is considered a part of general business
analysis, so it is useful to the executives of a company. It can help them grow the
organization, increase the streams of revenue the company receives and also get
ahead of competitors.
 A subset of environment analysis is the PEST analysis, or some of its variants, like
the PESTLE analysis. This is a form of that looks at four relevant factors that affect a
business environment, and these- Political, Economic, Social and Technological
factors-create the acronym “PEST”. There are other variations, such as PESTLE,
which includes Legal and Environment factors. However, the four factors in PEST
analysis are the main economic factors that affect a business.

Economic Factors and Their Effects on Business

 Economic factors are essential part of all business analysis, no matter whether it is
PEST analysis, PESTLE analysis, or any other kind of business analysis. These are the
main factors considered when a company makes financial decisions.
 These factors are connected to money, goods, and services. They affect businesses
on a micro-level, but they are a lot more powerful than that- they also affect the
entire economy on a macro-level. The economy, whether local economy or a global
one, will pretty much be the determining factor in the details associated with the
operation of a company, such as the value of its assets, consumer demand and even
taxes.
 Some economics factors you must think about in your business include exchange
rates, interest rates, recession, inflation, taxes, and demand and supply. Here is a
closer look into three factors and their connection to business:

Interest Rates
Interest rates are everywhere, and are imposed by many different people. In
fact, banking institutions are obsessed with knowing what the status for interest
rates in the economy is for a good reason. It is how they determine their lending
practices. It is also good information for a company that relies on debt capital to
finance ambitious projects.

Exchange Rates
This is a slightly more nuanced topic than that of interest rates. At the heart
of it, exchange rates are an important factor to consider for any business involved
in importation and exportation of various goods and services. When exchange rates
fluctuate, they affect the ability of a company to pay its international suppliers in a
satisfactory manner. This can also affect the profit margin of the company, as well
as the amount of resources it needs to stay afloat.

Recession
Whenever an economy faces a recession, it has the potential to change the
attitude taken by consumers toward their purchasing decisions. This may force
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companies to drop prices to stay afloat.

BE ABLE TO DO
Apply your understanding to the effect of the various socio-economic affecting business and industry

Let’s Practice! Activity : IDENTIFICATION

Directions: Identify the following terms as described. Write your answers on a separate
sheet of paper.

________________ 1. This rate is everywhere, and are imposed by many different

people. In fact, banking institutions are obsessed with knowing what the status
for this rate in the economy is for s good reason.
______________ 2. This is a slightly more nuanced topic than that of interest rates.
At the heart of it exchange rates are an important factor to consider for any
business involved in importation and exportation of various goods and
services.
_______________3. It has the potential to change the attitude taken by consumers
toward their purchasing decisions. This may force companies to drop prices to stay
afloat.

________________ 4. Refers to the social science that studies how economic activity
affects and is shaped by social processes.

________________ 5. It is the PEST analysis, or some of its variants, such as the PESTLE
analysis. This is a form of that looks at four relevant factors that affect a
business environment, and these- Political, Economic, Social and Technological
factors-create the acronym “PEST”.

REMEMBER
Key Points

 Socio-economic
Is the social science that studies how economic activity affects and is
shaped
by social processes.
 Interest Rates
Interest rates are everywhere, and are imposed by many different people. In
fact, banking institutions are obsessed with knowing what the status for interest
rates in the economy is for a good reason. It is how they determine their lending
practices. It is also good information for a company that relies on debt capital to
finance ambitious projects.

“Unido, Junto avanza con el EduKalidad Cree, junto junto puede!”

Prepared by: Lucybel R. Arquiza / Teacher I
Manicahan National High School
 4

 Exchange Rates
This is a slightly more nuanced topic than that of interest rates. At the heart
of it, exchange rates are an important factor to consider for any business involved
in importation and exportation of various goods and services. When exchange rates
fluctuate, they affect the ability of a company to pay its international suppliers in a
satisfactory manner. This can also affect the profit margin of the company, as well
as the amount of resources it needs to stay afloat.

 Recession
Whenever an economy faces a recession, it has the potential to change the
attitude taken by consumers toward their purchasing decisions. This may force
companies to drop prices to stay afloat.

TRY
Let’s see how much have you learned today!

A. ESSAY Writing.
Directions: Write your answer on a separate sheet of paper.

1. How Do Socioeconomics Factors Affect Business?

2. What are those economic factors that affects business?

ELECTRONIC SOURCES:
Nicky LaMarco. “The Socioeconomic Factors Affecting Small Business” October 19, 2018.
https://smallbusiness.chron.com/socioeconomic-factors-affecting-small-business-73234.html
REFEREN
https://www.countyhealthrankings.org/explore-health-rankings/measures-data-sources/county-health-rankings-model/health-
CES
factors/social-andeconomic-factors
https://bmchealthservres.biomedcentral.com/articles/10.1186/s12913-016-1661-6

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DISCLAIMER
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ANSWER KEY

IDENTIFICATION

1. Interest rate

2. Exchange rate

3. Recession

4. Socioeconomic

5. subset of environment analysis

“Unido, Junto avanza con el EduKalidad Cree, junto junto puede!”

Prepared by: Lucybel R. Arquiza / Teacher I
Manicahan National High School