Inflation: Inflation affects the purchasing power of consumers, which in turn impacts
sales and revenue. Businesses must adjust their pricing strategies to cope with inflationary pressures.
Unemployment: High unemployment rates can reduce consumer spending, thereby affecting
demand for products and services. Conversely, low unemployment can lead to a talent shortage, affecting a company's ability to hire qualified workers.
Interest Rates: Interest rates influence the cost of borrowing. High-interest rates can deter businesses from taking loans for expansion, while low-interest rates can encourage borrowing and investment.
Exchange Rates: For businesses engaged in international trade, exchange rates are crucial. A stronger domestic currency can make exports more expensive and imports cheaper, affecting the
trade balance.
Fiscal Policies: Government spending and tax policies can stimulate or slow down economic activity. For example, tax cuts can increase disposable income for consumers, leading to higher demand for goods and services.