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Economics (130)
ECON 1012 (43)
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Department
Economics
Course
ECON 1012
Professor
Irene Foster
Semester
Summer

Description
Thursday, January 17, 2013 What is GDP and why does it matter? Economic Indicators – Measuring the Health of the Economy  Who measures it? o Governments, universities and private groups  What is measured? o Leading indicators – usually change before the economy changes o Coincident indicators – change about the same time the economy is changing o Lagging indicators – usually change after the economy changes Leading Economic indicators  Predict activity in the economy about 6-9 months in the future o Manufacturer’s new orders for consumer and capital goods o Money supply (M2) o S&P 500 stock index (stock-market index—investors faith in the market) o Index of consumer expectations (University of Michigan) Lagging Economic indicators  Lag behind the economy by several quarters o Average duration of unemployment o Ratio of inventories to sales o Average prime rate/interest rate charged by banks o Change in labor cost per unit of output Coincident Economic indicators (current state of the economy)  Provide info about the current state of the economy o Gross Domestic Product o Industrial production o Personal income o Retail sales Key Indicators of Interest to Macroeconomists  GDP  The inflation rate  The unemployment rate Fiscal Cliff  Fiscal= US budget o Taxation: income for the US government o Spending: defense, social programs, welfare, education, infrastructure, transportation  In the summer of 2011, Congress had a fight over the debt limit the US was able to have  Republicans said cut spending to pay back the debt  On Dec. 31 2012, if no decision was made tha
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