Question Details

Impact of Macroeconomic Variables On The Industries
This assignment involves analyzing several indicators of the macroeconomic conditions in an economy, such as interest rates, income, and other indicators such as CPI, inventory levels, wage rates, consumer confidence, etc. These will be provided by the instructor. Analyze these indicators and prepare a 3-4 page report explaining the expected short impact on firms in the following two industries in terms of product sales and operating costs: (two industries provided by the instructor). Follow the APA writing guidelines.


 I need to provide some clarification points regarding the Assignment No. 4.  There are very many industries and many macroeconomic variables. Rather than telling you which one to pick, so I end up with 25 papers that discuss the same industries and the same macroeconomic variables, I propose the following approach.
 
You pick the industry that you like and/or you maybe interested in eventually joining.  This can be anything from fashion design industry to airline or financial industry, car manufacturing, fast food industry, you name it.  You pick two of those industries.
 
Then, please take a look at some of the different macroeconomic variables.  Among them are:
 
Gross Domestic Product
Unemployment Rate
Inflation
 
Interest Rates
Business Investment
Personal Consumption
Pre-Tax Profits
Industrial Production
Consumer Prices
Producer Prices
Employment Costs
Auto and Light Truck Sales
Housing Starts
Current Account
Federal Budget Balance
Monetary Policy Evaluation
US Dollar Exchange Rate Forecast
 
I would like you to use the first three variables, i.e. GDP, Unemployment Rate and Inflation as a must in your analysis.  Obviously, you can select more macroeconomic variables (we also call them indicators) from the rest of the list above based on your choice of the industry.  For example, if you talk about Housing Industry, Housing Starts indicator would be your obvious choice. Again, interaction between first three indicators is a must, but the rest is up to you.  You need to think what significance the macroeconomic indicators have for the specific industry and firms that comprised the industry.  When GDP rate is going down, do all of the companies in the industry cut back? Is unemployment more important for some industries than for others?  Hint: pick radically different industries and see whether macroeconomic indicators are equally significant for them.