The word Macro means Large. Macro economy is the study of the economy as a whole. It looks at the economy from the aggregate instead of looking at individual firms in the economy. So the Macro economic factors are factors that affect the entire economy.
In this article, we want to show you some factors that affect the entire economy which can also affect you as a business unit.
Inflation refers to a persistent rise in the prices of goods and services. It can be caused when the aggregate demand exceeds supply.
This kind of Inflation is called demand push inflation. Inflation can also be caused when the cost of production rises up leading to high cost of goods and services, we call this kind of inflation, cost pull inflation.
As at present, the rate of inflation in the economy has risen up to 17.33% which is the highest it has reached in 4 years according to National Bureau of Statistics.
The rate of unemployment is one macro economic factor that affects businesses. When more people are unemployed, they do not earn income with which to buy goods and services. It will therefore affect the market and it will also affect social stability as some of these people can become criminals
3. Interest rate
The interest rate is another macro economic factors that affect our business. When interest rate is high most people are not attracted to borrow money and invest, rather people prefer to save their money so as to earn or take advantage of high rate of interest, this may have a negative effect on production and also on consumption.
4. General income level
The general income level has a serious effect on our businesses because when people's income increases they will tend to spend more. That is to say they have more money in their hand to buy the goods and services that they want.
That is why whenever the government increases the Minimum wage, marketers, traders seem to enjoy because this people will come to the market with the money paid to them and this will also affect the prices of goods and services.
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