## # A tibble: 1,096 × 5
## # Groups: symbol [8]
## symbol date price change text
## <chr> <date> <dbl> <dbl> <glue>
## 1 GDPC1 1947-01-01 2034. NA 1947.1,
## Growth: NA
## 2 GDPC1 1947-04-01 2029. -0.00267 1947.2,
## Growth: -0.3%
## 3 GDPC1 1947-07-01 2025. -0.00207 1947.3,
## Growth: -0.2%
## 4 GDPC1 1947-10-01 2057. 0.0156 1947.4,
## Growth: 1.6%
## 5 GDPC1 1948-01-01 2087. 0.0150 1948.1,
## Growth: 1.5%
## 6 GDPC1 1948-04-01 2122. 0.0165 1948.2,
## Growth: 1.7%
## 7 GDPC1 1948-07-01 2134. 0.00573 1948.3,
## Growth: 0.6%
## 8 GDPC1 1948-10-01 2136. 0.00112 1948.4,
## Growth: 0.1%
## 9 GDPC1 1949-01-01 2107. -0.0138 1949.1,
## Growth: -1.4%
## 10 GDPC1 1949-04-01 2100. -0.00341 1949.2,
## Growth: -0.3%
## # … with 1,086 more rowsManagers need to know: Managers make decisions based on the overview of the economy. Understanding how long downturns will last and how long upturns will last for the company is crucial for the company. Overlooking patterns and data that has been accumulated overtime including jobs, inflation, unemployment will help to make a decision on how to proceed with the company’s product. When a manager understands when production levels are decreasing they take this into consideration for how much product they created in the economy.
Approving loans to the qualified creditors could have helped the prevent the Great Recession. With other factors like capital spending and the number of exports and imports, the Great Recession might of been harder to stop than anticipated. Being aware of these fluctuations are key to slowing down the possiblity of a recession.
| your customers/products | magnitude of spending changes | timing of spending changes |
|---|---|---|
| consumer services | very stable | coincident with GDP |
| consumer nondurables | stable | coincident with GDP |
| consumer durables | volatile | coincident with GDP |
| housing construction | very volatile | leads fluctuations in GDP |
| capital spending | very volatile | lags fluctuations in GDP |
| govt. spending, federal | moderate | not always corr. with GDP |
| govt. spending, state & local | stable | lags fluctuations in GDP |
| exports | volatile | not corr. with GDP |
| imports | volatile | varies depending on product |
By this time, the experience that the economy has with recessions have progressed overtime. The Great Depression was a historically famous recession because of the outcome and the amount of people who suffered. The Great recession, although it was caused due to the housing market and creditors being credited loans that they were not qualified for, could have been a lot worse in some aspects.
Gross Domestic Product
Volatile. with exports and imports fluctuating, it can have an impact on the economic cycle and the number of goods being produced and bought by consumers.
stable in some aspects. Was not the main cause of the Great recession, but still plays a role in the economy and how it fluctuates. Key takeaway is consumer spending are investments in physical equipment and facilities by businesses, government, purchase of goods and services. It also accounts for two-thirds of GDP.
GDP vs Consumer Spending
GDP vs Consumer Services
GDP vs Consumer Durables
GDP vs Consumer Non-Durables
Very volatile. The housing market was falling along with the stock market and it devalued a lot of homes during this time. Key Takeaway: Housing can be one of the most volatile sectors of the economy because the need for bedrooms and paying for them move up and down significantly.
GDP vs Nonresidential Construction
Very volatile Key takeaway: The purchases of plant and equipment have changes across the business cycle. It can fluctuate to 20 percent annual growth to 10 to 20 percent downfall. Individual kinds of capital spending have history of being more volatile than others.
Moderate Key takeaway: Businesses can sell to the government if need be and federal spending usually does not correlate with the economy unless there is weak federal spending which can cause a recession
Volatile Key Takeaway: Exports are volatile in the sense that they are more stable than the housing market but less stable than consumer spending. With the growth of exports in America it has become a source of goods and can change the path of the economy if the number of exports decline drastically.
Volatile Key takeaway: Imports have a stronger connection with the economy than exports. America imports goods for which they have volatile spending patters and being stable in both imports and exports is important in stabilizing the economy.
Explain each of the following terms in your own words. The author explains the terms in the textbook. If necessary, you may also Google the term on the Web. Good resources include:
Measures the product level in the national economy. The number of products used in a certain time period is calculated by GDP.
Real GDP is data that is adjusted to inflation while nominal GDP is data not adjusted for inflation.
The total value of economic production within a country in a year.
The overview of business activities. Analyzing the number of sales and the weakness in the economy help justify the possibility of a recession.
Variables that point in a certain direction that the economy will soon follow in the future. These indicators will move up and down and this helps predict how the economy will move.
The Great Recession lasted for 18 months during the time period of December 2007 to June 2009. During this period of time, the housing market was at a decline, poor health outcomes, downfall in the stock market, the value of homes decreased, and baby boomers had trouble retiring.International unemployment increased during this recession due to the loss of jobs as well.