Site Loader

Macroeconomic variables are indicators or main signposts signaling the current trends in the economy. Like all experts, the government, in order to do a good job of macro-managing the economy, must study, analyze, and understand the major variables that determine the current behavior of the macro-economy. For the purpose of such an assessment, three macroeconomic variables are particularly important: gross domestic product (GDP), the unemployment rate, and the inflation rate. The GDP equals the total value of goods and services produced in a country during a year. Economic growth is, therefore, a sustainable increase in the amount of goods and services produced in an economy over time. Inflation is an increase in the overall level of prices measured by the consumer price index. This index shows how the value of money changes over time. Inflation is one of the primary concerns of economists and policymakers because it imposes a variety of costs on the economy. When the inflation rate is high, the real value of money erodes. People on fixed incomes, such as pensioners who receive a fixed dollar payment each month, cannot keep up with the rising cost of living. The third variable is unemployment rate. Unemployment rate  is a key indicator of the condition of the labor market. The unemployment rate is defined as the percentage of people willing to be employed at the prevailing wage rate, yet unable to find job opportunities.     My product is milk and these three macroeconomic variables have some affect on my product that I selected. Firstly, if GDP will increase, the whole market will have positive effect. If the total value of goods and services produced during a year increased, that would be a sign that economy is good in the country and people’s income would be good too. So, my product will willing to sold more if GDP increased. In addition, GDP has some fluctuations at U.S.A., but Wal-Mart has been increasing their sales since 2014.  Secondly, rise of the inflation will have negative effects on my product, because life will be getting expensive and also my product would be more expensive to produce. On the other hand, my product is necessary for some people like pregnant women and kids. So, milk is inelastic product and inflation won’t affect milk sales too much. Moreover, inflation rate has increased in last 3 years, but it didn’t affect Wal-Mart sales. In addition, rise of unemployment rate have some different effects. First of all; if this rate will increase, producers can pay less to workers and produce their products more cheaper; because there will be more people who are looking for a job so labors will willing to earn less salary. On the other hand, high unemployment rate is an indication of bad economy. So, this bad economic situation will affect mostly all industries and my product’s demand would decrease. In addition, unemployment rate has decreased in last 3 years and it has some positive affects on Wal-Mart sales.

Post Author: admin

x

Hi!
I'm Erica!

Would you like to get a custom essay? How about receiving a customized one?

Check it out