Econ 545 Project 2 Macroeconomic Analysis

3351 words 14 pages
Deciding to start a business is brave and adventurous. The first step to success is a brilliant, viable, profitable idea. Whether you have decided to do it on your own because you are tired of working for someone else, or you are laid off after many years in your organization, before you decide to invest your life savings and get buried in debt, consider the big picture, the current economy, your demographic target consumer and do your research. The idea of solar energy is one such brilliant, viable idea. True the demand is present for such energy, but before taking the leap, consider the market saturation, competition, governmental rules and regulations and other determent factor that will influence the success of your
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Increase global economic confidence caused rise in 2007. The cycle continues to lower and raise on a steady basis with 2015 looking very positive.
(Now and the Future, 2014)

Unemployment / Inflation
Unemployment is a major determinate factor on the success of a new business venture to the impact unemployment has on the economy. Unemployment rate is defined as the percentage of the labor force that is unemployed. The unemployment rate measures the percentage of the labor force that is unemployed:

Determining the labor force is essential to estimate the unemployment rate in the United States. The labor force is defined as the percentage of the working-age population in the labor force.

The labor force participation rate is important because it determines the amount of labor that will be available to the economy from a given population. The higher the labor force participation rate, the more labor that will be available and the higher a country’s levels of GDP and GDP per person. (Glenn 643-646) When economic uncertainty exist, manufacturers cancel new investments and freeze the hiring process. Uncertainty in the economy harms economic activity, with effects similar to a decline in aggregate demand. Companies cut back on spending which causes unemployment to rise. When unemployment rises, there is a reduction in output. (United States Department of Labor, 2014)