Homework Question on General Motors-Company Outlook
- Economic Analysis Paper Four: Short-Term Company Outlook – General Motors Your fourth analysis paper is the short-term company outlook. Using your company selection, complete the following Main Elements:
- Using the relationships between macro variables and company/industry performance and the short-term outlook for macro variables from Paper Three, develop a short-term (about one year) outlook for your company that is shown as an extension to the historical data tables or graphs you developed in previous papers. (the last three papers are attached for reference)
- Answer the following questions on the outlook: o Is the macro economy helping to promote growth in your industry? o Are current government policies likely to result in slower or negative growth in demand? o Will costs be adversely affected or helped by government policies?
- Conclude with an assessment of how current macro policies are affecting your industry or company and any steps companies within the industry can take to benefit from or mitigate the effects of the policies.
Homework Answer on General Motors-Company Outlook
The supply, demand and profits generated from the automotive industry are greatly influenced by the macroeconomic factors. The industrial history has demonstrated the trends followed within the business cycle plus how the economic indicators have affected the industrial performance over the years. Measures like production, real GDP, interest rates, inflation, unemployment and automotive sales are among the most dominant factors that can be used in determining the condition of the auto industry (Doucet, 2010).
The macro economy has been promoting growth through factors like technology, which helps in boosting the industry’s/company’s growth. Technological advancements have contributed greatly in helping General Motors and other auto companies to produce more durable and quality vehicles that attract the targeted consumers while also meeting their current needs.
Similarly, the rate of inflation and unemployment has been affecting the volumes of products sold by companies in this industry including GM During recessions, employment rates have been observed to decline and improve when the economy rejuvenates. According to Spiegel (2007), this trend has been obvious and it corresponds with the business cycle statistics and the rates of unemployment within US. Indeed, inflation and unemployment have been observed to have a direct correlation or relationship with each other. Besides, inflation further imparts many costs upon society.