Macroeconomics Final Report

Macroeconomics Final Report

Automotive Industry Goods and Services

The automotive industry is selected for analysis in this paper. The industry is composed of companies that manufacture motor vehicles and motor vehicle parts such as bodies and engines. However, not all parts are included in the motor vehicles belonging to the automotive industry. Examples of such parts include fuel, batteries, and tires. The primary goods offered in this industry are light trucks such as vans, pickups, sport utility vehicles, and passenger automobiles. Also, commercial vehicles such as large transport trucks and delivery trucks belong to this industry, only that they are considered to be secondary. The automotive industry is one of the largest sectors in the US economy. The industry contributes significantly to employment levels by employing more than 925,000 people. In addition, the industry creates indirect jobs in the form of automobile dealers, which employs more than 1,250,000 people. According to Bertomeu et al. (2021), the industry accounts for 3% of the United States GDP. Many companies operate in this notable sector. Major brands that operate in this sector include Ford Motor Company, Toyota, Honda, General Motors, Volkswagen, Nissan, Tesla, BMW, Hyundai Motor Company, Chevrolet, and Jeep.

Macroeconomic Factors to be Monitored By Business Executives in the Automobile Industry

There are three significant factors that business executives should be concerned with while operating in this industry. The three include the real GDP, the unemployment rate, and the inflation rate. Notably, the inflation rate is selected for discussion concerning the automotive industry. When the production of new cars slows down, the prices of new cars go higher, making it difficult for most consumers to purchase cars. As of 2021, the new car inflation rate saw the prices of automobiles go higher by 8.8% (Bertomeu et al., 2021). Thus, business executives should consider the inflation rate an important factor that influences the level of sales made. When the rate goes higher, consumers’ ability to purchase decreases and the resulting influence on the automotive industry is reduced sales. On the other hand, when the inflation rate goes down, more sales will be anticipated, and thus, business executives will enhance their production capacities. It is worth noting that the inflation rate affects the prices of automobiles both directly and indirectly. On the direct part, the inflation rate influences the selling price of cars. On the indirect part, an increased inflation rate will result in increased costs of owning a car, such as high fuel and maintenance costs, which may discourage prospective customers from making car purchases.

Reviewing the Provided Excel Table and Graph For Inflation

The excel table and graph for inflation indicate that since the year 2015, the inflation rate has increased steadily. Therefore, this points to increased car prices and reduced demand for the automotive industry. However, the inflation rate graph indicates that in 2019, the curve adopted a downward trajectory which means a reducing inflation rate.

Summary of Future Projections

The automotive industry has existed for a long time and plays a role in the world’s overall economy. The industry has sustained both high and low inflation rates in the past. Notably, this is expected even in the future. According to Gao et al. (2016), the overall global sales of the automobile industry will continue to grow despite an anticipated drop in the annual growth rate, which has dropped to around two from 3.6 per cent in the past five years. One of the factors contributing to this decline is the inflation rate increase. However, the projections regarding the future of this industry remain optimistic.

References

Bertomeu, J., Evans III, J. H., Feng, M., & Tseng, A. (2021). Tacit collusion and voluntary disclosure: Theory and evidence from the US automotive industry. Management Science, 67(3), 1851-1875.

Gao, V. P., Hans-Werner, K., Detlev, M., & Dominik, W. (2016). Automotive revolution – perspective towards 2030. McKinsey & Company. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/disruptive-trends-that-will-transform-the-auto-industry/de-DE

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Week 9 Assignment – Economic Principles – Macroeconomics
Overview
It is important to be able to convey your understanding of macroeconomic concepts by communicating them to others. In the workplace, you might do this by writing papers or reports (as you did for the Week 5 assignment) or creating presentations for your team, manager, or clients. For this assignment, you will develop a final report.
Use the Week 9 Macroeconomic Paper Template [DOCX] to help you get started.

Macroeconomics Final Report

For this final report assignment, you can use the same industry you selected for the Week 3 assignment, or you can select another industry.
Prepare a 2–3 page final report in which you examine one of the macroeconomic variables below:
Real Gross Domestic Product (GDP).
The unemployment rate.
The inflation rate.
Instructions
Choose an industry that interests you. (Remember, an industry is not a company. An industry is a group of companies doing the same thing. Ford is a company. Automobile manufacturing is an industry.)
Do research on your industry. In a few short paragraphs, describe your selected industry.
Be sure to write in your own words.
Identify the goods and/or services the industry provides.
Identify some of the major companies in this industry.
Add anything else about the industry that you think is interesting.
Keep track of your sources by copying their Internet addresses (URLs). You can paste these URLs at the end of your paper as your references.
Select one of three macroeconomic variables (real GDP, the unemployment rate, or the inflation rate) that a businessperson in your chosen industry should monitor, and explain why that variable is important and how it might have an impact on your selected industry.
Describe in a sentence or two the important movements of the variable in the table and graph.
Excel tables and graphs are attached for each of the three macroeconomic variables (real GDP, the unemployment rate, and the inflation rate).
Review the Excel table and graph for the macroeconomic variable that you chose.
Summarize how you think this industry will perform in the future.
Be sure to provide support for your prediction of this future industry performance.
Your report should include a minimum of two references/citations in the text.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
Resources to Complete the Assignment
Week 9 Macroeconomics Assignment Aid With Excel Examples [DOCX].
Statista.
This assignment is aligned to this course outcome:
Apply macroeconomic concepts to current and personal economic events and decisions.