Unit 14- Economics & Analysis Flashcards
Definition of a depression
severe downturn lasting six quarters with unemployment 15% or more
What is the sequence of the 4 business cycles?
Expansion, Peak, Contraction, Trough
How does CPI account for inflation?
through constant dollar adjustment
Stagnation
prolonged periods of slow or little economic growth, usually accompanied by high unemployment
Stagflation
term used to describe the unusual combination of inflation and high unemployment
Leading Indicators to predict economic improvement
money supply (M2), building permits, stock prices, initial claims for state unemployment compensation, new orders for goods, machine tool orders, changes in sensitive material prices
Coincident Indicators (confirm where economy is)
employment levels, number of hours worked, personal income, industrial production, GDP, manufacturing and trade sales
Lagging Indicators (change after the economy has begun a new trend)
corporate profits, avg duration unemployment, labor costs, ratio of inventories to sales, commercial loans outstanding,
Working Permits (LE/C/LA)
LE
New Orders for consumer goods (LE/C/LA)
LE
Machine Tool Orders (LE/C/LA)
LE
Changes in inventory of durable goods (LE/C/LA)
LE
Changes in sensitive materials prices (LE/C/LA)
LE
Stock Prices (LE/C/LA)
LE
Changes in business and consumer borrowing (LE/C/LA)
LE
of Hours Worked (LE/C/LA)
C
Employment Levels (LE/C/LA)
C
Nonagricultural employment (LE/C/LA)
C
Personal Income(LE/C/LA)
C
Industrial Production (LE/C/LA)
C
GDP (LE/C/LA)
C
Corporate Profits (LE/C/LA)
LA
Avg Duration of Unemployment (LE/C/LA)
LA