Chapter 1 It’s Not Just about Forecasting
The following are the key points in the chapter. Elaborate on each point in at least 30 words.
Understanding economics can help you to diagnose the causes of increases or decreases in sales volumes and costs.
Explaining Economics allows for you to see general trends in markets that a Executive, CEO, CFO, and marketing guy may overlook. One example of this would be in a bank that sees deposit growth slow down. An executive would look at this decrease and would believe the solution would be to high interest rates. While an economist would be able to examine this problem through a different lens allowing for a more accurate resolution by looking at the overall trends of bank deposits. This would be to wait it out to seee what happens in the future
Business decisions are about the future and must rely on a view of the future.
This can be done mainly by looking at societal trends and using them to see how society can effect the business world. When there are outlier’s in theses trends that is when economist tend to be wrong but for the most part they are the most accurate at giving you accurate information about the future to make business decisions
Economics can help you form a more accurate vision of the future, compared to other common methods of forecasting.
Economics can help you understand what the near future may look like by giving you information that is going on in society that might directly effect how effective your business is run. This process allows economists to analyze relevant data and make predictions about an economy’s future accurately. * As a business manager, you should focus more on the broad magnitudes of changes rather than specific numbers.
This should be done to insure that your company doesn’t make changes due to natural ups and downs of the market. The market is always moving up and down and is never stagnant. Therefore viewing broad magnitudes of changes are important since you will be less likely to overreact to small changes in the market