How does macroeconomic change affect business?

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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


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