1.
Which of the following factors is considered under the 'Economic' component of PESTLE analysis?
A
Government tax policies
B
Inflation rate and interest rates
C
Technological innovation
D
Environmental regulations
Answer and explanation
Correct Answer: B — Inflation rate and interest rates
The correct answer is B: Inflation rate and interest rates.
In PESTLE analysis, the Economic component covers macroeconomic factors such as inflation rates, interest rates, exchange rates, economic growth, and unemployment levels. These factors directly influence purchasing power, cost of capital, and overall business profitability.