Eco 561 Week 5 Learning Team Deliverable

ECO 561 WEEK 5 LEARNING TEAM DELIVERABLE

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ECO 561 Week 5 Learning Team Deliverable

Learning Team Deliverable

Introduction

The nation’s economy can be redefined by statistics and data reports; specifically economic indicators. Economic indicators allow economists and others (private, public, non-profit agencies) to analyze the health of the economy. The applicable agency releases the corresponding reports on daily, monthly, or quarterly schedule. Furthermore, the various types of indicators are classified by timing or direction in relation to business cycles. Because of the vast amount of data available, it is important to understand which one are necessary for a particular study; indicators are only helpful if they are used or interpreted correctly. This paper will list some ofthe top reports used in a business analyst, discuss its relevance in decision-making and the economy.

GDP

One of the most common indicators is the Gross Domestic Product (GDP). It is the primary measure of a nation’s performance; peruses annual total outputs of goods and services (McConnell, Brue & Flynn, 2009).To measure GDP all of the spending on final goods and services are summed upevery quarter or year. The items include personal consumption, gross private domestic investments, government purchases, and net exports (McConnell, Brue & Flynn, 2009).GDP is a goodestimator for profit growth and in determining the expected rate of return on capital.The Federal Reserve uses the data to adjust monetary policies. For example,the Federal Reserve reduced the federal fund rates to nearly zero percent, and implemented different programs to support the liquidity of banks to aid in improving the financial market.

The graph below depicts a quarter to quarter change in real GDP (2013-2014).As illustrated, the...