A macroeconomist is a financial professional who studies the behavior of things that are related to the economy with a view of understanding the way in which the economy of a nation functions. The related factors that a macroeconomist studies include aspects like business cycles, the rate of unemployment, and international finance in relation to its effect on national finance. The result of the study by macroeconomists helps various governments and multinational corporations make an informed evaluation of the economy and develop effective business strategies.
One of the economic factors studied by a macroeconomist is the business cycle. The business cycle is an important indicator of the economic health of a nation. It comprises all of the demands and consumption of goods and services produced in a country. The macroeconomist studies the rate of demand for finished products in every business cycle, which is every quarter. He or she studies the rate of consumption of the products and services and also makes projections based on the results of the analysis. If the demand falls appreciably in consecutive business cycles, the macroeconomist may come to the conclusion that there is a recession.
Macroeconomists monitor economic indicators like the rate of unemployment. During economic downturns unemployment rates soar, while they go down when the economy is doing well. Such studies are important, especially in countries with welfare systems where economic downturns mean that many people are out work. Soaring claims for unemployment benefits at the same time may put an undue strain on the budget of a nation.
Another function of macroeconomists is to study the financial trends on the international market to see how such trends may affect the national economy. For instance, an increase in the price of oil on the international market will trickle down to increased gas prices. Such an increase has a ripple effect on other products and services, which may be marginally increased to compensate for the increase in gas prices. Also, an increase in raw materials also trickles down to the consumers who have to pay a higher price for products as the manufacturers try to compensate for the higher amount spent on purchasing raw materials.
Such an increase may cause consumers to buy less of a certain product. For instance, if the price of gas is significantly increased, more consumers may be forced to look for other means of transportation, including biking, cycling or walking, in order to save money. The macroeconomists will determine how the reduced demand for gas and other related products will affect the economy.