The average businessman can’t lower taxes or introduce new legislation that’ll affect the entire economy. They must instead understand these factors on a grand level and ensure their business aligns to laws, regulations, and policies. Economic factors, as discussed above, are related to inflation, taxes, unemployment, and the recession. While people in business can track trends and implement planning, many businesses are not recession proof. Among many economic factors affecting business some are; interest rates, demand and supply, recession, inflation, etc. Let us take a look at such economic factors. Let us take a look at such economic factors. Also, markets anticipate future inflation. If they see a policy likely to cause inflation (e.g. cutting interest rates) then they will tend to sell that currency causing it to fall in anticipation of the inflation. How the exchange rate affects inflation. If there is a depreciation in the exchange rate, it is likely to cause inflation to increase.