Essay Sample on Microeconomic and Macroeconomic Policies Effect on the Industries

Introduction

Many industries have emerged since the period of immemorial. This is a result of the human demand to refined commodities that will ensure an efficient flow of their day to day living. As such, this paper will table an economic assessment of the industrial growth and development, the microeconomic indicators and their significance, and trend on the economy.

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The relative size and the growth rate of an industry can be in most cases determined by consideration of the inflation and the gross domestic product. This two may have far much influence of the economy in the industrial sector. For example, where industry would like to measure its economic growth, they would consider a percentage rate in the emerging real gross domestic product. Here, an actual gross domestic product is used mainly because it sums up all the total of the produced regarding constant prices or costs while ignoring the impact of the change in the rate. This makes it the most accurate parameter that can be used in measuring the output of any economy. Farther, another way that can be used to measure the size of the industry is structured health, the probability and the income flow of the industry.

Besides, several microeconomic indicators should be checked continuously by the various industries. These indicators include the rate of unemployment, inflation rates and interest rates (Etzo, 2011).

Also, the above-mentioned indicators are very significant to the industries and may have a wide range of impacts. For instance, the rate of inflation as one of the microeconomic indicators will provide a rise in the prices of good. This will have consequences which may be negative or positive. The negative result will emerge where investors will feel threatened when the value of assets falls below the expected level thereby discouraging them from investing their capital. As such money circulation shall have significantly reduced impacting negatively on the industrial growth.

Again, is the unemployment or lack of jobs, an act where one will be willing to do anything for survival. The low unemployment rate comes along with several effects which include loss of output and the national income as those who are not employed will be idling, paying no tax yet the government will be servicing their needs. This act will lower the production rate in the industries as some energy will be wasted resulting in slow industrial expansion. Again, such groups would not be able to buy or purchase anything because they will lack enough money. Such a move is likely to discourage the industries from producing new products because they will lack a market for the same.

In simple terms when the rate of unemployment is very high in the country, it significantly affects the economy by reducing the production rate, and when there is high employment rate, there is an increase in production, increased tax rate, therefore, an increased in the economy.

Further is the interest rate which in most cases is set by the central bank. This is the act which can be regulated depending on the economy, and it can be beneficial or harmful to the population. When the interest rate is adjusted, those who had taken loans will have awkward moments in paying their loans with higher interest rates, something that may look hard to adapt for an ordinary person. Contrarily, when the interest rate is lowered, those who had loan will find it easy paying their loans at a lower interest value. Farther, the lower interest rate will attract more demand for money while a higher interest rate will repel those taking loans.

Microeconomic policies may have a broader effect on the industries. These effects can be explained based on Gross domestic products which act as the gauge of the total hardest of the economy in a given period. When there is a stable economy, the industries will get extra finances to boost their production which would be obtained from the stock exchange. This means that when there is a positive effect on the gross domestic product, there should also be a positive impact on the return of shares.

About the unemployment rate, when a company is in a sound state, it will invest his capital on human, something that will eradicate the unemployment issues. This will boost the economy as new energy shall have been converted to proper use.

Finally is the inflation that may significantly, decrease the formal debt of a given Industry. This will boost its operations since inflation is linked to the interest rates and the fiscal policy (Focacci, 2005).

In the macroeconomic indicators, there is a trend that passes by the years. This trend is discussed below using a graph. The graph shows the economic trends of the period. The aforementioned can be seen where there is a variation at different intervals, staring at the trough point, expansion, peak, and finally, contraction which suggest that there still enough room for development in the coming years.

The following are therefore the key aspects that may be considered in the development of the economy in the many years to come. First is by the enlarging of the Global insistence which has seen the international gross domestic products grow from a very lower value in the past years to a higher value in recent years. Farther, there is also an activity that is coming up in fading the power drags, that is ensuring the stabilization of the prices of oils. Secondly, then there is also tax reformation that is taking hold. Finally is the overcoming of the natural calamities and the advancement of a higher percentage of employment as shown in the graph below (Etzo, 2011).

The graph again may show the trend in the unemployment rate in America which has seen it decrease with a higher value.

Conclusion

In conclusion, global development is habitual to go down over the years as the international feeble depletes, business and expenditure balances, and funding circumstances narrow. This can be seen from the EMDEs, which justifies that the advancement in goods foreign buyers will remain booming, although the pick-up in goods retailer is envisaged to be sophisticated. As such, the responsible policymakers should erect the financial cushion to help in the growth by creating a favorable environment for competition and trade impartiality.

References

Focacci, A. (2005). Empirical analysis of the environmental and energy policies in some developing countries using widely employed macroeconomic indicators: the cases of Brazil, China, and India. Energy Policy, 33(4), 543-554.

Etzo, I. (2011). The determinants of the new interregional migration flow in Italy: a panel data analysis. Journal of Regional Science, 51(5), 948-966.