Question

Why should company managers or investors pay attention to macroeconomic indicators? Is it a good idea for company managers to do a formal review of key macroeconomic indicators every quarter (every 3 months) or is it a waste of time?

Answer 1

Ans. Macroeconomic indicator : They are used to measure the economic circumstances of the particular country.

Some indicators are

1. GDP growth : It is calculated to know how fast the economy is growing and what is the present situation of the economy.

2. Inflation: If is used to know if the country has more or less supply of money.

3. Interest rates : They are the rates set up by the lender when he gives certain amount to the borrower .

The company managers should pay attention to the macroeconomic indicators in order to work for a long term as these indicators hep the company managers to understand the market scenario using which they can make changes.

For eg , if there is inflation then they can charge higher amount by the customers for the services since there is large money supply in market.

Yes , it is a good idea to review the indication every quarter because these indicators never remain constant and they keep on changing so if you want your company to be updated with the ongoing scenario , then you must review it every 3 months .