A$.$ Choose one macroeconomic factor that affects the industry in which your companies operate.

a$.$ A macroeconomic variable is something that $(1)$ the firm has no control over, and $(2)$ that alters the environment in which the industry$/$firms operate.

$$ i$.$ For examples and explanations, see Chapter $12$ in the textbook or lecture slides

b$.$ Identify a macroeconomic factor that is currently influencing, or is projected to influence, your company in the near future. Avoid selecting factors that were once significant but are no longer relevant $($e$.$g$.,$ the COVID$-19$ pandemic$).$

c$.$ Each company$$s Value Line report will often discuss the most relevant macroeconomic factors for that company.

B$.$ Classify your selected macroeconomic factor as either a supply shock or a demand shock.

a$.$ If this factor primarily affects your companies$$ revenues, then it is likely a demand shock. If it primarily affects your companies$$ costs, then it is likely a supply shock.

b$.$ Remember: demand is both the willingness to buy and the ability to buy.$$ Thus, your selected factor could affect willingness and$/$or ability to buy your company$$s goods and services.$$

c$.$ Remember: supply is influenced by both the costs and availability of inputs along with the costs of substitutes and compliments in the production process.