By the end of this chapter students should be able to:

• Analyse the impact that changes in the macro-economic environment can have on business organizations
• Understand the concepts of aggregate demand and supply and the impact that these variables have on gross domestic product, unemployment and inflation
• Explain the causes and effects of business cycles and the factors that cause booms and slumps to come to an end
• Be aware of the debates concerning the sustainability of strong economic growth
• Understand current thinking on the nature and determinants of national competitive advantage and the links between national competitive advantage and firm-level competitive advantage
• Discuss issues of risk and uncertainty and be familiar with some of the forward looking strategies firms might adopt to limit their exposure to risk