Essay: Macroeconomics: GDP, national income, unemployment

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Essay: Macroeconomics: GDP, national income, unemployment

Sample Essay

There are a number of macro-economic indicators that an entrepreneur can use to determine the performance of his or her firm. Wal-Mart Stores, Inc. is an international corporation that runs a chain of stores dealing with a number of products in its stores. Since this corporation operates in 15 countries although under different names, it means that the economy of each country of operation need to be considered in determining its financial performance (Daniel, 2010). With the firm contributing so much to the U.S economy, it follows that the macro-economic factors that affect the U.S affect the organization greatly. The performance of Wal-Mart’s organization can be determined by considering the country’s GDP, national income and unemployment.

The GDP of a country determines the overall economy of a country. The general formula for the computation of GDP = Y+C+I+(X-M) in which Y is income, C is consumption, I is investment, X is exports and M is imports. A person’s income denotes the consumption rate of the person. If the income of person is low, it follows that the consumption rate is low. This will eventually mean that the sales at Wal-Mart Stores, Inc. will be low since people will have low disposable income. People will be encouraged to buy only the essentials and leave out the luxuries. Since Wal-Mart Stores, Inc. deals with a number of products, the sales will only be from the essential goods and this will mean low sales and low revenue.

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