ANSWER:
The confidence indicators derived from consumer survey results are of significant important in assessing short-term economic developments. These sentiment indicators provide crucial information on consumer’s assessments of the current economic situation and their expectations and intentions for the future. When consumers become pessimistic they reduce their spending and increase their precautionary saving; and when they become optimistic they increase their spending. Thus the consumer confidence and consumer expectations provides an indication of future developments of households’ saving and consumption, based upon answers related to their expected financial situation, there can develop an idea about the general economic situation, capability of savings and unemployment, hence acts as a leading indicators in economic standing.
Macroeconomic Explain why the results of Consumer Confidence and Consumer Expectations surveys are leading indicators in...
Document one or more methods used to characterize and measure consumer confidence. Compare and contrast how confidence might be related to financial markets’ expectations of risk of a recession, similarly to interest rate spreads. Do you find consumer confidence to be a useful measure? Explain why or why not. Also comment on indicators contained in “economic fundamentals,” in its value to firm managers.
What four measures are the most important indicators of the health of the economy? What are the other leading economic indicators? Go to a financial news source to find out the status of all the economic indicators at this time. Make note of your findings and the date for purposes of comparison. How does the information inform you as an investor? Read the results of the most recent Consumer Confidence Survey athttp://www.conference- Saylor URL: http://www.saylor.org/books Saylor.org 341 board.org/economics/ConsumerConfidence.cfm. How might...
Applications: Explain how to use the indexes of leading, coincident, and lagging economic indicators of business cycle fluctuations to predict the occurrence of: (a) an ongoing expansion; and (b) an upcoming recession.
list and explain a few macroeconomic indicators a compag should consider when a European company is deciding about offshoring.
It is customary for the News media to report about consumer confidence and investor confidence while discussing the national economy. How do you think the confidence of the economic agents affect the economy? From personal or work experience, state factors that could cause increase in consumer spending and investor investment. Do consumer and investor confidence trend reports affect your spending pattern? Explain. The government purchases component of GDP does not include spending on transfer payments such as Social Security. GDP...
If consumer expectations of a branded product are met: a) consumers are willing to pay more for the product. b) a perfectly elastic demand curve results. c) a perfectly elastic supply curve results. d) no monopoly power is present.
Which of the following statements is correct? A. Consumer confidence is extremely important and can have a great impact on future economic activity. The same is not true of business confidence. B. Consumer and business confidence is extremely important and can have a great impact on future economic activity. C. Because it is subject to change, and frequently does, consumer and business confidence has only a minimal impact on future economic activity. D. Because it has historically remained steady, consumer...
Macroeconomic .- Use the foreign exchange model to explain the impact of an increase in US interest rates on the Australian dollar? - Use the per worker production function to explain why additional capital per worker cannot be a source of long run economic growth in an economy
1. Explain how consumer pessimism (or loss of consumer confidence) may affect AD and the macro equilibrium viz., the equilibrium value of each of the macro variables in the tables below, in both the long and short runs. 2. Apparently both investor pessimism and consumer pessimism would affect the macro- economy via a reduction in aggregate demand. Explain whether and why (a) there are any difference at all in their effects on prices and quantities in the various (incl. labor,...
Describe the economy during the Great Depression using the economic indicators (i.e. GDP, UE, inflation, business profits and consumer confidence). Before the Great Depression, classical economists such as Adam Smith, thought the economy would correct itself. It was also viewed that as long as firms produced goods, there would be people to buy those goods (This is known as “Say’s Law”). What was Keynes’ explanation of the Great Depression? Explain the idea of the multiplier. What did Keynes think should...