1.3: Economic Indicators as Components of Economic Stability
Numerous economic indicators help business leaders determine what the future might hold. These might include the unemployment rate, housing statistics, the consumer price index, and more. In a 2-3 page essay, discuss what the data seems to be showing in the results of your research. Rank or order the economic indicators you consider most important, especially what the indicators say about the economy. In your conclusion, share where you believe the economy is going.
Go to the CPI Inflation Calculator and perform two calculations. First, compute what a pair of denim jeans cost the year you were born if they cost $80 today. Then, compute what a car cost during the year you were born if it sells for $23,000 today. Feel free to explore the inflation rate of interest by performing additional calculations on this calculator.
Read this article about the pattern of US prices and inflation rates from 1913 to the present. Pay particular attention to the charts that show the comparison between US rates and those of other countries worldwide.
Read this section, which explains Gross Domestic Product. The GDP is the dollar value of goods and services produced in a given country in a year. What is the significance of GDP as an economic indicator?
Read this section to understand more about economic growth. Looking at GDP alone does not give much of an indication of the health of an economy. It is the change in GDP that is relevant. If GDP goes up, the economy is growing. This positive movement is what we want as we leave behind the most recent recession. Complete the exercises at the end of the section.
Carefully review this chart, which compares the GDP per capita of several countries around the world. Note the date of the information provided. Studying GDP per capita will allow you to compare one country to another. Why is the US GDP per capita higher than China's? How is GDP per capita found?
Read this section for an in-depth look at the relationship between inflation, the economy, and how we spend our money. As you read this material, consider the effect of inflation on your purchasing power and buying habits. As the rate of inflation increases, there is a decline in your purchasing power as a consumer, but a decrease in inflation and lower prices can also affect what we buy. For example, as gas prices decline, we see an associated decline in the rate of hybrid car purchases. List three ways that inflation might affect your life.
Review this section on inflation. Inflation is essential for the US consumer because it affects buying power and how far the income dollar will reach.