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Macroenocomics Microsoft Corporation

Essay by   •  April 5, 2019  •  Term Paper  •  342 Words (2 Pages)  •  13 Views

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Macroeconomy

As we all know, Microsoft Corporation is the biggest world's personal corporate software development guide.Therefore it is very important to investigate its macroeconomics.

Before starting business, every industry and company needs find their markets and customers, the windows 10 of Microsoft isn’t an exception, so Microsoft should know who want to buy its production and which market it should focus on. One of the most effective way to help Microsoft find its customers and markets is to measure the GDP or the Purchasing Power Parity. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.    

Although GDP can’t reflect the economics of countries and regions completely, it can still help economists and companies evaluate economics of different areas.  Many companies like using per capital GDP to evaluate the purchasing power of customers, Microsoft can also use this way for evaluating. Microsoft should focus on markets which have high per capital GDP, because customers in these markets may have more income and they can afford the expensive softwares of Microsoft.

Inflation is an important factor Microsoft should pay attention to. The inflation rate is calculated by comparing the price level in one time period to the price level of a previous period.The reason why Microsoft should concern inflation is not only because inflation may increase the materials expense, but also because it may increase the purchasing power of customers. According to the Bureau of Labor Statistics consumer price index, prices in 2018 are 15.97% higher than prices in 2010, the dollar experienced an average inflation rate of 1.87% per year during this period.According to the U.S. Bureau of Labor Statistics, prices for new cars were 2.84% higher in 2018 versus 2010.Compared to the overall inflation rate of 1.87% during this same period, inflation for cars was lower. Because overall inflation increases more than software prices increase, people can spend more money on buying those products.Microsoft may have bigger markets because of higher overall inflation.

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