The external economic environment strongly influences the performance of the firm. Your firm operates in a market-oriented world economic system filled with opportunities and challenges. In this course we develop a working framework within which you can analyze and anticipate how dynamic economic forces can significantly impact your firm’s performance. Economics is the study of how to best manage a system’s scarce resources, whether the system is the business, the household, or the economy as a whole. Economic analysis leads to decision rules for the manager consistent with the goal of the business.

Key Takeaways:

• Learn to anticipate the consequences of business and political decisions.
• Understand the key indicators of our present and future economic health.
• Appreciate the role our fiscal and monetary authorities play in determining the performance of our economic system.
• Preview statistical techniques available as tools for business planning.
• Catalog the sources and uses of important business and economic information.

Important Topics:

• Quantifying the behavior of buyers and sellers focusing on: (a) how to measure household response to changes in prices and income (elasticities), (b) how to measure sellers’ response to price changes, and (c) the importance of these elasticities
• Investigating the inter-temporal behavior of the household and the firm.
• Establishing the important linkages between households, business, government, and the international sectors. We will establish how the behavior of these four economic agents are interdependent, and that changes in the behavior of any one agent impacts the other three.
• Explaining and measuring business fluctuations.
• The appropriate role of policy makers–activists or non-activists?

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