Keynesian economics was founded mainly based on the works of John Maynard Keynes and was the beginning of macroeconomics as a separate area of study from microeconomics. The target rate for annual inflation from the Federal Reserve is 2%. Can a production possibility curve (PPC) be upward-sloping? When charted on a graph, these fluctuations show that businesses perform in cycles; thus, it is called the business cycle. Macroeconomics focuses on aggregates andeconometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Fundamentaland value investors may disagree with technical investors about the proper role of economic analysis. Microeconomics Definition, Uses, and Concepts, Economics Defined with Types, Indicators, and Systems, Economy: What It Is, Types of Economies, Economic Indicators, The Oracle Speaks: Warren Buffett in His Own Words. You are also looking at your companys position in the marketplace relative to your competition, how the economy and other external influences are affecting your business, employee diversity, and employee satisfaction. Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach. So you can't really tell if a country is experiencing and expansion or recession in this case. This could reduce the company's revenue if sales decrease because of the company's higher prices. The underlying economic principles of a government will say much about how that government will approach taxation, regulation, government spending, and similar policies. Macroeconomics - Overview, Goals, Economic Indicators For example, if many of your customers have suffered from downsizing and are newly unemployed, it might be a good time to offer discount products. Rather than paying the tariff, the company can look for a domestic source for these goods that is cheaper than the imported good.
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