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Micro, small and medium-sized enterprises employ substantial numbers of the population and make up a significant amount of economic activity, but the influence of macroeconomic policy action on these businesses remains understudied. Government policymakers who seek to understand the constraints and opportunities being faced by these businesses need to understand how the broader macroeconomic context, and policymaking within that context, filters down to affect the smallest businesses. This paper provides a broad outline of how various macroeconomic policy actions affect micro, small and medium-sized enterprises and sets out some policy considerations for those who seek to improve the commercial environment for these firms. The paper also finds that the differential impacts of interest rate changes on small firms, in particular, is not widely studied and is a possible avenue for further research.

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