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Economic Growth And Economic Indicators Essay

852 words - 4 pages

Economic growth is measured by the change in real GDP. Real GDP is the total value of all of the goods and services produced in a year, adjusted for inflation. GDP, though not the best indicator of the quality of life, nations with a high GDP correlate to nations with a higher quality of life. The changes in real GDP for 2013 general trend of increasing GDP and hence increasing economic growth. The latest estimate for fourth quarter fiscal year 2013 is 2.4 percent change in GDP. GDP increased in quarters 1-3 of 2013 but decreased in the fourth quarter. The decrease in the fourth quarter may be problematic for continued economic growth but the general trend of increasing GDP offsets this ...view middle of the document...

The third indicator for consumer activity is real disposable income. Real disposable income is the income individuals receive after taxes are subtracted from it and government transfers are added to it. Real disposable income is the main component of purchasing power and represents the actual amount of money that a consumer can use. This affects consumer behavior because changes in real disposable income change the amount a consumer can spend on goods and services. This results in changes of GDP.
All three indictors have increased from the previous data period(see Index 2-4) with the CSI currently at 81.6, the change in PCE at 0.3 percent, and the change in PDI at 0.3 percent. . For CSI, we see a steady decline from July 2013 to October 2013. This shows a decline in consumers’ outlook on the economy. This then experienced an increase in both November and December 2013, small decrease in January 2014, and a slight rise inFebruary 2014.. This shows an increase in consumer confidence but the CSI does not return to the initial data point of 85.1 which remains the peak of the CSI in the period observed(July 2013-February 2014). This points to economic growth as consumer spending is increasing due to increasing disposable income and because of this, consumer confidence is increasing. The change in the PCE is positive throughout the period observed with the exception of December 2013. . It experiences it’s largest increase in the period of August 2013 with a change of 0.5 percent from the previous month. The...

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