How Does Economics Affect Macroeconomics

933 Words4 Pages
This paper aimed to show how both macroeconomics and microeconomics plays a role in the overall success of an organization. The key decisions confronting the firm right from inception to operation to growth are themes business, economics can explore and which are useful for entrepreneurs and business leaders. With increasing globalization, the fact that firms now operate in a global arena means that they must have the knowledge of how macroeconomic trends affect macroeconomic decisions. In economics, demand refers to the product, which an individual is willing to purchase for a specific amount of money. When looking at economics the first thing that comes to mind is supply and demand. In our everyday life, we use different products from toilet…show more content…
Elasticity is a when there is a demand in price change and the quantity of the products increases by the consumers. Most consumers like to compare prices while shopping, for instance, when coupon shoppers see prices decrease, and they tend to buy more of the products. However, if the prices increase they spend less money. For example, if the state decides to raise the taxes on cigarette, the prices of cigarettes prices will increase, most chain smokers are addicted and they have no substitutions, the other alternative they have is to keep buying, and the demand will be inelasticity. Another example is clothing. Consumers can choose the type of clothing they want and the price. Price elasticity of demand is always negative, which causes prices and quantity to move in different…show more content…
It examines the characteristics of the economy output, employment, inflation, and the interest rate. Few of macroeconomics indicators includes inflation, public deficits, and unemployment. “Macroeconomic indicators share important characteristics that set them apart from other indicators, such as those covering human rights or government transparency (e.g. Cooley and Snyder 2015).” Macroeconomics focuses on the economy between businesses and individual household. When the economy is operating at its natural level of employment, there could be an increase in unemployment. “The rate of unemployment consistent with the natural level of employment is called the natural rate of unemployment.” When Business experiences a decrease in production, it may generate additional unemployment. Another goal of macroeconomic is economic growth, which is defined as a long-run process that occurs as an economy’s potential output increase. Conclusion The conclusion of the research in economics, both macroeconomics and microeconomics have a role they play to help an organization to be successful. Most people have a misconception about economics. The economy places a big part of our everyday life whether it be from purchasing a house or going into business. Customers play a big part in the economics because they help determine the direction that the economy is
Open Document