The Importance Of Understanding Macroeconomics

1. Why is it important to understand macroeconomics if one is to be successful in global business?
First let us review what macroeconomics is, macroeconomics provides businesses, non-governmental agencies (NGO’s), governments, and individuals information regarding short run and long run metrics on the collective outputs that governments, consumers, and firms make in an economy. The foundation of macroeconomics is concerned “with human welfare” (Miles, 2012, p. 12). Macroeconomics is important because it allows the public to understand the economy on a macro(big) level, facilitating and assisting firms and governments in making decisions by providing them tools relating to fiscal policy, consumption, output, general welfare of the economy, and global economic policy. Macroeconomics gives academics, policy makers, and other interested individuals a view into the relationship between factors such as unemployment
By understanding macroeconomic concepts, statistics, and their relationships to your industry in the global market individuals can make informed business decisions. For example, looking at real Gross Domestic Product (GDP) growth and GDP per capita companies can decide how to price and produce products that people can afford and want depending on their relative wealth. By studying the economy, looking at the “aggregate

26). There are other measurement issues regarding misreporting, inaccurate tax data, inaccurate survey data, and other economic statistics. Sometimes measurement issues cause statisticians to revise their initial GDP figures. For example, in Denmark and Japan revisions to GDP growth can be “about 0.6 percentage points different from the initial estimate” (Miles, 2012, p.