Importance of Macroeconomic and Microeconomic Environment in International Business

BUSINESS ECONOMICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Importance of macroeconomic and microeconomic environment with respect to international
business context..........................................................................................................................3
Impact of changes in macroeconomic and microeconomic environment within international
business context..........................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business economics is being defined as the field which undertakes the use of the
economic theory and the quantitative methods for analysing business enterprises. The economics
involves the various factors contributing the diversity of the company like the relationship and
structure with the capital, labour, product market and many others related aspect. The present
report will outline the importance of macro and micro economics in the international business
context. In the end the impact of these changes within the microeconomics and macroeconomics
will be highlighted.
MAIN BODY
Importance of macroeconomic and microeconomic environment with respect to international
business context
The economics is being divided in two different categories that is microeconomics and
macroeconomics (Castillo-Vergara, Alvarez-Marin and Placencio-Hidalgo, 2018). The former is
related with the decision being made by business and people relating with the resource
allocation, prices and other related factors. On the other hand, latter involves the study of the fact
that how the market or whole country is working and the policy of government is affecting the
economy as a whole and what impact does it is creating over the economy as a whole. For the
effective management of the country and the business it is very important for the country to have
effective use of micro and macroeconomic policies. Both the microeconomic and
macroeconomic is very important for the effective management of the business and business
environment. The major importance of both these aspects for the business is that it will assist in
proper decision making. This is particularly because of the reason that when both these factors
will be analysed then this will provide a good base for the country and business to take proper
and effective decisions.
In addition to this, both the microeconomic and macroeconomics is essential for the
effective decision to be taken by the individual relating to the pricing of the particular
commodity within the industry. Along with this the macroeconomics is also used in dealing with
the general price levels relating to the overall industry and this will assist in managing and
maintaining the price level to the low for the overall economy (Chang, McAleer and Wong,
2020). Along with this another major importance of both these type of economies is that it aims