How does macroeconomic change affect business?

HideShow resource information

How does macroeconomic change affect business?

What are the effects of a recession?

  • Stagflation if inflation is on the increase
  • Depreciation
  • Less consumer confidence- Negative multiplier effect
  • Demand for inferior goods increase
  • Rising unemployment

Analyzing the Macro Economy: Aggregate Demand and Aggregate Supply

Aggregate demand is the amount of demand there is for goods and services in an economy over a period of time.

AD= Consumption + Investment + Government Spending + (Exports - Imports)

To increase AD:

  • Lower interest rates
  • Decrease taxes

Comments

No comments have yet been made

Similar Economics & Business Studies resources:

See all Economics & Business Studies resources »See all Unemployment resources »