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Unformatted text preview: The economic environment Managers must monitor currency, infrastructure, inflation, interest rates, wages, and taxation. In assessing the economic environment in foreign countries, a business must pay particular attention to the following four areas: Average income levels of the population. If the average income for the population is very low, no matter how desperately this population needs a product or service, there simply is not a market for it. Tax structures. In some countries, foreign firms pay much higher tax rates than domestic competitors. These tax differences may be very obvious or subtle, as in hidden registration fees. Inflation rates. In the U.S., for example, inflation rates have been quite low and relatively stable for several years. In some countries, however, inflation rates of 30, 40, or even 100 percent per year are not uncommon. Inflation results in a general rise in the level even 100 percent per year are not uncommon....
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- Fall '11