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Explain the approach of characterizing the modern economic environment.
Modern economics gives various perspectives or angles to seem at real world economic issues. An economic issue or phenomenon may be very complicated and be influenced by many issues. The approach of characterizing the economic environment can grasp the most necessary factors of the issue and take our consideration to the most key and core attributes of an issue by which we can ignore unimportant details.
Usually an economic environment comprises:
(a) A number of individuals,
(b) The individuals’ characteristics, such as preferences, technologies, endowments, etc.
(c) Informational structures, and
(d) Institutional economic environments that include fundamental rules for establishing the basis for production, exchange, and distribution.
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