How key macroeconomic questions affect global logistics
How this relates to global logistics
If we apply these general macroeconomic areas of interest to the real world of global logistics, we can see how they can affect management decision-making with regards to the allocation of resources and the factors of production. Any one of the key macroeconomic measures (GDP, unemployment and inflation) not doing so well can stop businesses making economic and investment decisions. Because government policies and control can affect macroeconomic issues, how the government manages the economy is important to all businesses, including logistics businesses.An example that affects global businesses and economic growth is economies of scale and the productivity of factors of production. When the government invests in logistics infrastructure that improves productivity, such as faster and wider roads, bigger airports and port terminals, productivity improves and this leads to economic growth (GDP).As investment rises, the more efficiency gains there are. Investment is all about confidence – when investors are confident in something, they will invest in it more. Investment is key to economic stability. The effect of investment on economic growth is recognised as the multiplier effect on aggregate demand, which was first noted by Milton Keynes (1936).Recognising what is happening in the macroeconomy, not just in your own country but globally, is a key management skill that helps with running a global logistics business.Your task
Conduct some of your own research on basic macroeconomic ideas. Consider the question posed in the video at the start of this step. What longer term macroeconomic effects, as a result of the introduction of trade tariffs, might the finance manager at CV1Logistics expect?
References
Keynes, M. (1936). The general theory of employment, interest and money. Palgrave Macmillan.Our purpose is to transform access to education.
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