It is common practice to only look at one indicator

This preview shows page 1 out of 1 page.

It is common practice to only look at one indicator when analyzing the macroeconomy. Economic indicators provide a view of the economy over an extended period of time. Economic indicators are inherently macroeconomic. Trends, patterns or situations that assist in forecasting the economy are considered lagging indicators.
The costs and benefits of policy accrue differently to different stakeholders. Unsustainable levels of production could be positive in the short term and negative in the long term. We cannot objectively say whether a policy is negative or positive. Business owners have a clear incentive to only use practices that take into consideration long term consequences.
This can help reduce unsustainable levels of production This includes monetary and fiscal policy Lowering interest rates are an example of this Too much of this can lead only to inflation
An increase in imports will cause a rightward shift in AD. A recession in one country can have a negative effect on AD in another country. Trade surplus occurs when exports exceed imports. If the dollar is weak, people in other countries will purchase more U.S. products.
The Chinese central bank printed extra currency to exchange with the U.S. The standard of living in the U.S. increased. U.S. exports to China increased. The GDP of the U.S. increased, and the GDP of China decreased.
It decreases consumer willingness to purchase. AD shifts to the left. If AD increases past full employment, prices will rise and return us to equilibrium. It decreases the money supply.
Provides a way to measure inflation Published by the Bureau of Labor Statistics Captures the price variation between consumer goods, with goods held constant Divided up into crude, intermediate and finished goods

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture