Economic Indicators: The Primacy of GDP/BMC Certification
What is inflation?
A general increase in prices of goods and services which diminishes the purchasing power of money. In other words, it means that a unit of money tomorrow buys less than the same unit of money would buy today. Which is why cost of living has gone up.
GDP per capita is a measure of prosperity because it divides the total GDP of a country by its population. Which of the below forecasts for a country would result in the highest GDP per capita growth?
An increase of 2% in GDP and a population growth of 0%
In the United States, why is there a strong relationship between unemployment and GDP?
Consumer spending accounts for two-thirds of the U.S. economy. When the number of unemployed consumers rises, there is less consumer spending.
Essential Economic Indicators
Economic Growth, Inflation, Unemployment, Business Confidence, Housing
Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the following can be a true statement at the time of the chart was captured?
The country has inflation. The top line is nominal growth and the bottom line is real growth.
Leading indicators
attract the most investor interest.
Economic growth
is cyclical, with a series of booms and busts.
Investors interpret
the economy through economic indicators.
In 2015, an accounting gimmick gave Ireland a 26% growth rate in GDP. What does this event reflect about the nature of GDP?
If the measurement of economic activity evolves, GDP can change.
Here is the most important economic data for New Zealand and Switzerland. Which economy did better year-over-year (YOY) in the fourth quarter of 2018 compared to the fourth quarter of 2017? Use the two tables to investigate.
New Zealand performed better.
What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a recession in the United States?
Nonfarm payrolls go DOWN, the PMI indicator goes DOWN, the housing starts goes DOWN
Which of the following lines is the best leading economic indicator?
PMI
Real GDP growth
is the main gauge of economic health.