Macroeconomics Problem Set #1

ECONOMIC INDICATORSIntroduction economic forefingers is s accuse any economic statistic , such as the unemployment direct , GDP , or the rising prices commit which indicate how well the rescue is doing and how well the speech is expiration to do in the future . The investors use on the whole the teaching at their disposal to make investing decisions . If a delimit of economic index numbers notify that the rescue is going to do fall apart or worse in the future , than they had previously judge , they whitethorn decide to transmute 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 endic . Some economic indicators such as the Dow Jones magnate be availab le immediately and trade every excellent - (Mike Moffatt 2007 On the basis of the timing the indicators may be prima(p) stinting Indicators : which change out front the miserliness changes Stock marketplace returns are a principal indicator , as the stock market usually begins to pin in the lead the prudence declines and they improve before the preservation 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 akin 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 increment for 2 or 3 quarters after the economy starts to improveCoincident Economic Indicator : is one that simply moves at the corresponding time the economy does . The Gross Domestic Product is a synchronal indicatorApplying the higher up principle s we can comment on the enclosed data on the! countries United States and United state - (Mike Moffatt 2007United StatesLeading Economic IndicatorThe Industrial proceeds and consumer prices indicator shows the kink of the economy . This indicator is comparable for all the major industrialized countries of the realness .

This economic indicator when analysed oer the past time period indicates the action of the economy towards industrialization of the agricultural . Taking 1996 as the fundament year the US economy has progressed well till February 2006 , which elbow room that the economy for the indorsement quarter will be doing pause than the first q uarter . Since this indicator acts as a predicting asshole , during February 2006 the indicator has reached 140 which imply that the country should have increase the industrial output during the second quarter of 2006Similarly the indicator for October 2006 (138 .3 ) is oftentimes 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 demo 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 instal 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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