International Business: Macroeconomic and Microeconomic Analysis

This report delves into the realm of business economics, examining the interplay between micro and macroeconomic factors within the context of international business. It underscores the critical importance of both microeconomic and macroeconomic environments in shaping business decisions, resource allocation, and market dynamics. The report highlights how these economic concepts facilitate effective decision-making, pricing strategies, and the fostering of international trade. Furthermore, it analyzes the impacts of changes in macroeconomic and microeconomic environments, such as increased competition, labor market fluctuations, and technological advancements, on international business operations. The report concludes by emphasizing the need for businesses to understand and adapt to these economic shifts to ensure sustainable growth and success in the global market.

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

at increasing the international business. this is pertaining to the fact that the major aim of both
these policies is to increase the trade within the international market as this will provide a good
market base to the different companies and this will promote international business and will
improve the working condition of the companies and countries.
Moreover, proper allocation of the resources is the another major importance of the use
of micro and macroeconomics (Voynarenko and et.al., 2019). This is particularly because of the
reason that both these economic concepts will outline the better utilisation of the resources so
that they are optimally utilised. The reason pertaining to the fact is that the resources within the
country are very less and the users of those resources are too many. Hence, this can lead to
discrimination among the use of the limited resources and this will outline the effective
utilisation of the resources in optimal manner.
Furthermore, another key importance of both the types of the economic concept is that
this will foster the working of the economy in more effective manner. This is pertaining to the
fact that when the effective use of both the policies is undertaken then all the strategies are being
prepared on the basis of the objective of attaining the economic development. Hence, this will
outline the effective ways in which the government and other business can effectively use the
resources and plan for the effective development of the businesses and the overall economy
(Syverson, 2019).
In addition to this, the proper use of the economic policies will definitely result in the
proper utilisation and use of the finance within the economy. This is the most essential aspect for
the growth and development of the economy. The major reason pertaining to the fact that when
the finance within the economy will be managed in proper and effective manner and there is
proper flow of money is there in economy then this will result in the economic development of
the country. Hence, this will improve the economic condition of both the companies and the
country itself.
Impact of changes in macroeconomic and microeconomic environment within international
business context
There are many different types of the changes being taking place within the
macroeconomic and microeconomic concept. Hence, it is very essential for the reason that there
are many different impact which the use of these economic reforms create over the working of
the economy (Dominko and Verbič, 2019). The major reason underlying this fact is that when

the international business is being focused then this definitely results in many different impact
over working efficiency. Hence, this is particularly because of the reason that the international
market involves the use of many different theories and concept and it is not necessary that all
will result in same output. Hence, there can be many different types of impact due to the use of
macroeconomic and microeconomic policies.
The major impact of the use of the different economic policies with respect to the
international marketing environment is the competition (Litau, 2018). This is particularly
because of the reason that when the international business is promoted then the major negative
impact which is caused is the increase in competition. This is majorly due to the reason that the
economic policies are implemented to the company operating in the international market. Hence,
within the international market the competition is already very high and any other change within
the economic condition can increase the competitive forces within the international market.
In addition, to this another major impact of the use of economic policies is that labour
and its availability. This is particularly because of the reason that it is not necessary that the
labour which is available in the domestic market is same available within the international
market that is on the same labour rate. Hence, within the international market it is possible that
the labour rate is high or low for the company. hence, in case the labour rate will be low then this
will be beneficial for the company. on the other side if the labour rate within the international
market will be high then company will have to pay high rates to the labour which is not in case
of domestic market.
Moreover, along with this another major impact of the use of economic policies that is
both macroeconomic and microeconomic policy will be over the use of technology as well. this
is pertaining to the fact that when the in the international market the use of technology is also
different for every country. The major reason pertaining to this fact is that all the countries are
different with respect to their working efficiency and the use of technology. Hence, it is not
necessary that if one country is good in technology then the other country will also be good.
Thus, due to this uneven distribution of the resources and the technology the country cannot
grow and develop in proper and effective manner (Tende and Lawson, 2021). Thus, this creates a
negative impact over the working of the country and the companies present within the country.
Thus, for this it is very essential for the country to manage the resources and the technology in

proper and effective manner so that the working of the country can be managed in proper and
effective manner.
Hence, when the economic policies will be used in proper and effective manner then this
will definitely promote the growth and development of the country and its economic status
within the international market. Thus, for the effective working of the country and the
management of the working of the economy it is very essential for the country to effectively
undertake the use of the microeconomic and macroeconomic policy in effective manner (Kaplan
and Violante, 2018). This is essential because of the reason that this will result in the proper and
effective working and operation of the economy. Thus, as a result of effective use of both the
economic policies the country will work and operate in good and effective manner within the
international market.
CONCLUSION
The above report concluded the fact that the business economics is referred to as the field
which takes care of the economic theory and the quantitative methods for the management of the
business. the above report evaluated the fact that both macro and micro economics are important
to be managed in international market. It is important because it assists the company to take
decision relating to the product, price, promotion and place. In addition to this, the different
impact was also highlighted in order to improve the working of the business. these different
impact involves like impact on marketing, competition, legal aspect and many other impact
which can affect the working to a great extent.

REFERENCES
Books and Journals
Castillo-Vergara, M., Alvarez-Marin, A. and Placencio-Hidalgo, D., 2018. A bibliometric
analysis of creativity in the field of business economics. Journal of Business Research, 85,
pp.1-9.
Chang, C.L., McAleer, M. and Wong, W.K., 2020. Risk and financial management of COVID-
19 in business, economics and finance.
Dominko, M. and Verbič, M., 2019. The economics of subjective well-being: A bibliometric
analysis. Journal of Happiness Studies, 20(6), pp.1973-1994.
Kaplan, G. and Violante, G.L., 2018. Microeconomic heterogeneity and macroeconomic shocks.
Journal of Economic Perspectives, 32(3), pp.167-94.
Litau, E., 2018, August. Entrepreneurship and economic growth: A look from the perspective of
cognitive economics. In Proceedings of the 2018 9th International Conference on E-
business, Management and Economics (pp. 143-147).
Syverson, C., 2019. Macroeconomics and market power: Context, implications, and open
questions. Journal of Economic Perspectives, 33(3), pp.23-43.
Tende, F.B. and Lawson, A.O., 2021. Business, Management and Economics Research.
Voynarenko, M., and et.al., 2019, September. Estimation of Innovative Business Processes of the
Enterprises in Conditions of Еmergence Economics. In 6th International Conference on
Strategies, Models and Technologies of Economic Systems Management (SMTESM
2019), Advances in Economics, Business and Management Research (Vol. 95, pp. 161-
166).