Understanding Economic Influences

Numerous economic indicators help business leaders determine what the future might hold. These might include the unemployment rate, housing statistics, the consumer price index, and more. In a 2-3 page essay, discuss what the data seems to be showing in the results of your research. Rank or order the economic indicators you consider most important, especially what the indicators say about the economy. In your conclusion, share where you believe the economy is going.

Economic Influences

This category is one of the most important external influences on businesses. Fluctuations in the level of economic activity create business cycles that affect businesses and individuals in many ways. When the economy is growing, for example, unemployment rates are low, and income levels rise. Inflation and interest rates are other areas that change according to economic activity. Through the policies it sets, such as taxes and interest rate levels, a government attempts to stimulate or curtail the level of economic activity. In addition, the forces of supply and demand determine how prices and quantities of goods and services behave in a free market.