Sample Essay on:
ECONOMIC INDICATORS AND ANALYSIS

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Essay / Research Paper Abstract

This 4-page paper answers questions concerning Federal Reserve policy as well as contraction and expansion policies.

Page Count:

4 pages (~225 words per page)

File: D0_MTecoindan.rtf

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Unformatted sample text from the term paper:

think about buying a new car, some business equipment, or a house? The main economic indicators that would be examined for a larger purchase would be the producer price index and gross domestic product. The GDP represents the total of whats produced in the economy, while the producer price index measures the price of goods and services at the wholesale level. The GDP suggests when more products are added to the market (meaning the price may be a little lower), while the producer price index discusses how much they cost to manufacture - which also gives an indication of price. If a producer is having to spend more money on manufacturing a particular good (like a car), the chances are pretty good that those costs will be passed down to the dealerships, and then to the consumers who visit the dealer. Another potential indicator to examine is the consumer price index. The difficulty with using the CPI in measuring whether to make a large purchase is that CPI tends to focus on basket goods (like groceries and so on). A car, a house or business equipment is somewhat outside the realm of a CPI. Finally, the Federal Reserve interest rate is also examined when it comes to getting a loan. The rate is what the Fed charges banks for borrowing money, and that is typically passed on to consumers and marked up a point or two, depending on market conditions and competition. A rising Fed market rate means rising interest rates, which might impact how much money a consumer can borrow, as well as how much he/she will have to pay for the money. The higher ...

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