Question

When managers analyze an economic situation of a country what general attributes should they consider?

Answer 1

Here are some key aspects a manager should consider while analyzing the economic situation of a country.

GDP- GDP is the monetary value pf all the products and services produced in a country in a specific time period. This is most important aspect to see while analyzing the economical condition of the country. GDP is measure quarterly but ultimately it is represented in the annual figure.

Unemployment- It should be measured that how many people in the country do not have job and out of work. Unemployment changes over period of time and can be affected by the interest rate, natural resources of the country etc. When the economy is in poor condition the employment decreases.

Inflation- Inflation is the changes in the general prices of goods and services over a period of time. The too high and too low inflation rate is an indicator of poor economic stability.

Government Stability- The Government should be stable in the country in order to maintain a good economic condition. Poor government stability spoils the nation.

Government Borrowing or national Debt- When the government makes the yearly budget it keeps the expanses high than the revenue. By this a deficit is emerged and this whole process is called deficit financing. When the government borrows loans from the World Bank or other countries or institutions then national debt is increased. This is not beneficial for the country. Hence this is also measured.

Other measures- The other indicators are like real disposable incomes, Labor productivity, Investment levels, Exchange rate, and Income inequality