Why macroeconomics is important for managers

Learning outcome Knowledge You learn basic macroeconomic concepts such as GDP, unemployment, inflation, interest rates and exchange rates about business cycles short run macroeconomic models; how fiscal and monetary policies affect activity levels, interest rates, exchange rates, trade, consumption and investment about international financial markets about economic forecasting about important macroeconomic crises, including the financial crisis and public debt dynamics Skills You should be able to use macroeconomic models to discuss how economic policies and other shocks will affect the economy, in particular how firms are affected analyze the economic situation of an economy relate the economic theories to the development of the Norwegian and the international economy General competence You should be able to see how economic trends and events will affect the firm's environments in the near future, and thus be part of your investment decisions and strategic planning.

Learning methods and activities 2 hours of lectures every week, and 2 hours of practical assignments every other week. Specific conditions Compulsory activities from previous semester may be approved by the department. Recommended previous knowledge None. Required previous knowledge None. Course materials Announced at the beginning of the term. Economics Social Sciences. To understand why a change in interest rates leads to changes in real GDP, we need to understand how lower interest rates influence decisions, such as the decision of how much to save, at the firm or household level.

Once we understand how an individual, on average, will change their behaviour we will then understand the large scale relationships in an economy. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions.

Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption,unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behaviour determines prices and quantities in specific markets.

Importance of macro economics to manager 1 Strategic investment decision If your company is operating globally then it helps to determine production capacity in different countries and anticipate the financial crisis and make strategic investment decision throughout the subsidiary countries.

So it imperative for the manager to know about Marco economics. If you are macro economics person and manager for this industry, you can take good decision during this bubble. If it is boom period the production used be increased but if the trough then he should minimise production or it can be end of product life cycle. For existence he should shift to new market or change or modify the product.

What we can say is that it can helps manager to plan for external factors basically Marco economics component. Open navigation menu. Close suggestions Search Search. User Settings. Skip carousel. Carousel Previous. Carousel Next. What is Scribd? Uploaded by Michelle Morrison. Did you find this document useful? Is this content inappropriate? Report this Document. Flag for inappropriate content.

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