Economic Conditions Essay -- essays research papers

To analyze an economy, certain statistics can be used to predict the economy’s future. This is important because it helps prepare people for prosperity or hard times. Certain indicators can be used to determine the future of aggregate demand and others can be used to determine aggregate supply. Using eight aggregate demand indicators and four aggregate supply indicators we developed a prediction for the economy in the near future. Changes in aggregate demand are reflected in changes of GDP. To find valuable indicators of the future aggregate demand is to find statistics that tell about change in the components of GDP (C+I+G+Nx). Aggregate supply is influenced by the costs of production to producers and the advent of new or better factors of production and technologies. The indicators we chose as meaningful are also ones used by the Federal Reserve to determine interest rates, automatically validating them as important. The trade deficit is one of the aggregate demand statistics. It shows the balance between imports and exports of the United States. This is the Nx part of GDP. Recently imports have risen while exports have remained constant, making the trade balance more negative and draining GDP. Consumer Confidence is an important indicator of GDP. This is an index created to reflect the sentiment of consumers and how likely they are to spend. This is the C in GDP. The index of Consumer Confidence has fallen for a fourth month in a row and is at a four year low. This sharp...