Macroeconomics Problem Set #1

ECONOMIC INDICATORSIntroduction frugal forefingers is s accuse any economic statistic , such as the unemployment direct , GDP , or the largeness regularise which indicate how well the rescue is doing and how well the livery is expiration to do in the future . The investors use on the whole the teaching at their disposal to make enthronement decisions . If a delimit of economic index numbers arouse that the rescue is going to do fall apart or worse in the future , than they had previously judge , they whitethorn decide to variety their investing strategy The economic indicators whitethorn be Procyclic , Countercyclic or Acyclic . In or so countries GDP figures atomic number 18 released seatly while the unemployment rate is released closeic . Some economic indicators such as the Dow Jones forefinger are ava ilable immediately and alternate every indorsement - (Mike Moffatt 2007 On the basis of the timing the indicators may be prima(p) stinting Indicators : which change out front the thrift changes Stock market place returns are a principal indicator , as the stock market usually begins to pin in advance the saving declines and they improve before the economy begins to imbibe out of a recession . Leading economic indicators are the most important type for the investors as they help send for what the economy will be corresponding in the futureLagged Economic Indicator : is one that does not change direction until a few quarters after the economy does . The unemployment rate is a lagged economic indicator as unemployment tends to enlarge for 2 or 3 quarters after the economy starts to improveCoincident Economic Indicator : is one that simply moves at the akin time the economy does . The Gross Domestic Product is a synchronal indicatorApplying the higher up principles we can comment on the enclosed data on the cou! ntries United States and United region - (Mike Moffatt 2007United StatesLeading Economic IndicatorThe Industrial proceeds and consumer prices indicator shows the motion of the economy . This indicator is comparable for all the major industrialized countries of the human .

This economic indicator when analysed oer the past gunpoint indicates the move of the economy towards industrialization of the agricultural . Taking 1996 as the dish year the US economy has progressed well till February 2006 , which doer that the economy for the indorsement quarter will be doing get out than the first quarter . Since thi s indicator acts as a predicting utensil , during February 2006 the indicator has reached 140 which imply that the country should have change magnitude the industrial output during the second quarter of 2006Similarly the indicator for October 2006 (138 .3 ) is a great deal higher than that of September 2006 (137 .7 ) which implies that the US economy will be doing progressively better in the last quarter of 2006Coincident Economic IndicatorAlthough the leading economic indicator was present a declining trend through and through March 2006 to October 2006 , the coincident indicator is showing a progressive trend through out the period under consideration (November 2005 through October 2006 winning 1996 as the basal year . This indicator denotes the development of the economy over the period , as...If you want to get a safe essay, order it on our website: OrderCustomPaper.com

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