The Impact of Economics on My Life as a Business
In order for business people to become successful in today’s global business, each businessman should be knowledgeable in study of microeconomics and macroeconomics. For the purpose of this study, the importance of the basic principles of microeconomics such as the supply and demand of labor and products2 and how individuals, households, and firms make decisions with regards to allocating their limited resources in markets where the trading of goods and services occurs3. and the macroeconomics which focuses particularly on the external factors that could affect the variables such as the Gross Domestic Product (GDP), unemployment rate, inflation rate, and exchange rate4 will discussed in order to enable the businessmen to understand and apply the useful economic theories in their future business decision making. Businessmen should be aware that there is a significant correlation between the increase in demand for goods and services as well as with the demand for labor. In case the economy of a country is booming, the domestic demand for finished products increases. The increase in the demand for products contributes to the increase in demand for human resources (workforce). Basically, this allows the talented men and women to have the demand for a higher salary or have an option to take double jobs and longer working hours. (See Figure I – A Good Economy below) On the other hand, in case the country is experiencing economic downturn or recession such as the Asian crisis in 1997 or a tragic event such as the September 11 terrorist attack in the United States, the demandfor human resources decreases since a lot of local businesses were directly affected and eventually had to declare bankruptcy or impose a mass lay-offs in order for them to be able to sustain the business financially.