Importance of Economics

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Economics plays an important role in firm decision-making. Macroeconomic conditions affect the firm in a number of different ways, including demand, taxation, competition, hiring and borrowing rates. Considering these in turn, demand for toothbrushes and other consumer staples is not cyclical with the health of the economy. While the macroeconomic health of the country is important, demand should not fall much when the economy stumbles. The business cycle is particularly important because right now we are in a state of slow recovery from recession. If this recovery picks up, our expansion will see strong gains, part of which will simply come from the economic expansion (Simpson, 2012). Taxation is an element of fiscal policy, and we should ensure that the strategies we undertake will minimize the tax burden placed upon the company. Competition is encouraged by trade policy. America's commitment to free trade means that we could potentially face a number of international competitors but more importantly that we are likely to have easy access to any number of foreign countries. Hiring is something that is affected by macroeconomic conditions and is directly relevant to our current expansion plans. Our ability to find quality people is one of the things that will influence our success in the marketplace. In a down economy, with a higher unemployment rate, it is more likely that we will be able to find good people. We can have an easier time hiring sales reps fresh out of
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