Tag: Key Concepts

  • Business Cycle

    A business cycle is defined as: Expansion: The economy is moving out of recession. Money is cheap to borrow, businesses build up inventories again and consumers start spending. GDP rises, per capita income grows, unemployment declines, and equity markets generally perform well. Peak: The expansion phase eventually peaks. Sharp demand leads the cost of goods […]

  • The Conference Board Leading Economic Index (LEI)

    A composite economic index tracking key elements of the US economy. Leading Economic Index Factors considered: Average weekly hours, manufacturing Average weekly initial claims for unemployment insurance Manufacturers’ new orders, consumer goods and materials ISM® new orders index Manufacturers’ new orders, nondefense capital goods excl. aircraft Building permits, new private housing units Stock prices, 500 […]

  • Inflation

    Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Most commonly used inflation indexes are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). Components of Inflation: Demand-Pull – When demand for goods and services exceeds […]

  • Gross Domestic Product (GDP)

    Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate. Components of GDP: Consumer Spending – When everyday people by goods and services such […]