What specific effect does corporate America have on the economy?

Question

And what specific effect does the economy have on corporate America?

I would like to learn the relationship between those two.

I don't want to sound too ignorant, but I would like to know the specifics for an essay. Using search engines did nothing except confuse me even more.

Thank you in advance.

Answer 1

If a major company lays-off a ton of workers, the unemployment rate is likely to increase and people are less willing to purchase items since they are more conscious of where their limited funds are going. If people are not purchasing expensive items, then a company may have more supply than they need and will lower their price to make items more affordable or lay-off more people. The average wage can go down as well since many people are looking for jobs and they can find good help at a lower price. (If not many people are looking for jobs, companies may have to increase their base pay to find quality help. If they are paying people more, people can afford to buy more items. The companies selling more items are making more profit and/or more items so they can expand their workforce and add more employees.) Hope this helps. It's not an answer that applies to all companies during all times, it's just my guess.