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In: Economics

Introduction: Describe economic indicators and briefly describe the United States economy(can talk about covid-19 and at...

  • Introduction: Describe economic indicators and briefly describe the United States economy(can talk about covid-19 and at least one paragraph)

  • Conclusion: Summarize the overall state of the United States economy. (can talk about covid-19 and at least one paragraph)

Solutions

Expert Solution

Economic Indicatore :  An economic indicator is a statistic about an economic activity. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles.

Economic indicators include various indices, earnings reports, and economic summaries : for example, the unemployment rate, quits rate (quit rate in American English), housingstarts, consumer price index (a measure for inflation), consumer leverage ratio and industrial production.

Four Economic indicaters

1. Interest Rates

Interest rates are the most significant indicators for banks and other lenders. Banks profit from the difference between the rates they pay depositors and the rates that they charge to borrowers. Banks find it increasingly difficult to pass on interest rate costs to consumers as rates rise. High borrowing costs correspond with fewer loans and more saving. This limits the volume of total profitable activity for lenders.

2. Gross Domestic Product

Countries around the world track levels of economic activity through gross domestic product (GDP) calculations. Increases in the level of spending or investments cause GDP to rise, and the financial service sector typically sees increased demand for its goods and services when spending and investment levels go up.

3. Government Regulation and Fiscal Policy

Government regulation is not necessarily an indicator in the traditional sense, instead, investors should keep an eye toward how regulations and tariffs might impact activity from the financial services sector. Banks, which comprise more than half of the entire sector in the U.S., are heavily influenced by reserve requirements, usury laws, insurance and lending guidelines, as well as the possibility of government assistance.

4. Existing Home Sales

The Existing Home Sales report is issued monthly by the National Association of Realtors. It provides banks and mortgage lenders with recent data on sales prices, inventory levels and the total number of homes sold.

United States Economy

The United States of America is a union of fifty states in North America. It is the world's largest economy. It is a mixed economy. That means it operates as a free market economy in consumer goods and business services. But, even in those areas, the government imposes regulations to protect the good of all. It operates as a command economy in defense, some retirement benefits, some medical care, and in many other areas. The U.S. Constitution created and protects America's mixed economy.

The economy of the United States is highly developed and mixed. It is the world's largest economy by nominal GDP and net wealth and the second-largest by purchasing power parity (PPP). It has the world's eighth-highest per capita GDP (nominal) and the tenth-highest per capita GDP (PPP) in 2019.

As the novel coronavirus (COVID-19) rips through America’s biggest cities, its effect is being felt far beyond the over 140,000 Americans who are confirmed infected. The quarantines and lockdowns that are needed to fight the virus’s spread are freezing the economy, too, with unprecedented force and speed. The stock market has sunk a quarter from its peak last month, wiping out three years of gains. Last week, meanwhile, brought news that a record 3.28 million Americans applied for unemployment benefits, the highest number ever recorded. Unemployment is shooting up far faster than it did during the 2008 recession, a sign the economy is headed toward recession.


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