## # 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 rows

Chater Openning Questions

Managers need to know:

Solution

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

Historical Experience

Gross Domestic Product

Profits across the Economic Cycle

Consumer Spending

GDP vs Consumer Spending

GDP vs Consumer Services

GDP vs Consumer Durables

GDP vs Consumer Non-Durables

Housing

GDP vs Nonresidential Construction

Capital Spending

Government Spending

Exports

Imports

Economic terms

Explan 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:

Gross Domestic Product (GDP)

The total amount of goods produced by a single country in a given year.

Real versus nominal GDP

Real GDP is the raw total of goods produced by a country in a given year, while nominal GDP is adjusted to account for inflation.

Gross National Product (GNP)

GNP is the equal to the sum of the GDP and the net income of foreign investments.

Recession

A recession generally takes place over the course of two consecutive quarters where the economy significantly drops.

Leading Indicators

A leading indicator is a piece or set of data that foreshadows or shows a future shift in the economy.

Economic events

An economic event is a drastic change either positively or negatively in the economy, due to a current event going on in the world.

2007 Great recession

The 2007 Great recession was caused by cheap credit and very relaxed lending standards. It eventually got to a point where banks had lent out trillions of dollars worth of mortgages that the properties themselves became almost worthless.