You have been asked to evaluate the economic potential of a new global market. What economic measures would you use? Explain each measure.
What will be an ideal response?
To evaluate the economic potential of a new global market, you would start with GDP and GNI. A country's GDP is a measure of the total market value of final goods and services produced in a year. GNI is GDP plus net income earned from investments abroad and minus payments made to nonresidents (net investment income in and out of a country). A country's income is only part of the economic picture. Purchasing power parity provides an estimate of the spending power of income within a country. Although an understanding of the macroeconomic environment is crucial for managers facing a market entry decision, of equal importance is the understanding of economic metrics of market size, population growth rate, and real income.
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