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Homework answers / question archive / What role does Macroeconomics play in your personal financial decisions and that of your place of work or firm you are familiar with? What are the resources that are available to you in your effort to understand current macroeconomic conditions?
What role does Macroeconomics play in your personal financial decisions and that of your place of work or firm you are familiar with? What are the resources that are available to you in your effort to understand current macroeconomic conditions?
Macroeconomics predict a country's economic condition, which plays a role in an individual's decisions that contribute to their financial plans, such as purchasing a house or retirement investment choices. Macroeconomic influences an individual's financial decisions because it affects the interest rate, which is important in financial planning. Interest rate impacts an individual's assets by determining the amount of income generated from an investment, and the liabilities by determining the amount an individual would have to pay to take a loan. It also causes indirect impacts in areas such as house prices. When the interest rates are high, the home buyers can only afford less mortgage since much pressure would be put on the house prices. The cost of goods and services in the market impacts an individual's financial decisions.
The assessment of macroeconomics also helps companies determine if expanding their production would be an ideal move according to the market situation. A country's purchasing power is influenced by the inflation rate, an indicator used in macroeconomics. Therefore, companies use these measures to determine if consumers would have enough money to purchase products from companies, or if they would be taken to the market and not be sold, leading to losses.
Resources that can be used to understand the macroeconomic conditions are released regularly. They include data on the inflation rate, current budget and account deficit and surpluses, unemployment rate, and GDP growth rate.