Does an extensive knowledge of Macroeconomics make for better entrepreneurial decisions? If yes which areas / principles offer most practical value to an entrepreneur?

Entrepreneurs benefit from understanding large picture macroeconomic indicators and how they might change the market of the goods or services they sell. Understanding which part of the business cycle an economy is in can help an entrepreneur to make important decisions. If a firm sells normal goods, where consumers purchase more as they get wealthier, a firm might want to expand their operation and consider raising prices to earn more revenue during a growth period. If there is a recession or economic growth has slowed, the firm who sells normal goods might not expand or increase their prices. If the firm sells inferior goods, where consumers purchase more when their income falls, they might want to expand during a recession or slow down.

Understanding the incomes of your customers can also help make better decisions. When inflation or unemployment is rising, consumers will have less income to spend on your products. Conversely, when unemployment is falling and inflation is staying low, they may have more income to spend on your products. Inflation can also work to make your costs more expensive, so firms should pay attention to the producer prices of the goods or services they sell. The entrepreneur should consider how their product fits into the local and national economy and what the larger indicators mean to their firm.