Topic > Economic Conditions - 861

To analyze an economy, you can use certain statistics to predict its future. This is important because it helps prepare people for prosperity or difficult times. Some indicators can be used to determine the future of aggregate demand and others can be used to determine aggregate supply. Using eight indicators of aggregate demand and four indicators of aggregate supply we have developed a forecast for the economy in the near future. Changes in aggregate demand are reflected in changes in GDP. Finding valuable indicators of future aggregate demand means finding statistics that indicate the change in the components of GDP (C+I+G+Nx). Aggregate supply is influenced by production costs for producers and the advent of new or improved inputs and technologies. The indicators we have chosen as significant are also those used by the Federal Reserve to determine interest rates, automatically validating them as important. The trade deficit is one of the aggregate demand statistics. Shows the balance between US imports and exports. This is the Nx part of GDP. Recently, imports have increased 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 consumer sentiment and the likelihood that they will spend. This is the C of GDP. The consumer confidence index fell for the fourth consecutive month and is at its lowest level in four years. This acute...