1. One of the most variable componetns of consumer spending from year to to year is spending on durable goods, especially new automobiles. Why do you think this is so?
2. What do the statistics on (web address) indicate about the direction of the economy after 2000 for:
a) Money GDP and Real GDP (http://www40.statcan.ca/l01/cst01/econ05.htm)
b) The level and the Rate of Increase of the Consumer Price Index (http://www40.statcan.ca/l01/cst01/econ09a.htm)
c) Employment Statistics (#unemployed = 1 278 000 divide by # in labour force = 16 689 000 = 7.7% rate of unemployment
d) Unemployment Rate (http://www40.statcan.ca/l01/cst01/econ10.htm)
What seems to be the causes of these trends?
Thank you very much.
Please find the attached solution.
13042 trends of economy
1. One of the most variable components of consumer spending from year to to year is spending on durable goods, especially new automobiles. Why do you think this is so?
Consumer spending accounts for two-thirds of demand and is the single most important driver of GDP growth. Consumer spending grows at a surprisingly rapid rate, primarily because of strong growth in employment, moderate gains in income and strong levels of consumer confidence. From the beginning of 21st century, the automobile promised a more liberating lifestyle and greater mobility, and this promise was cemented with a massive road and auto infrastructure. The origins of the automobile and auto-related infrastructure, with increased emphasis on road infrastructure had increased the spending on automobiles. The government subsidies, economic and political forces had firmly held in place the automobile and ...
The causes of trends in the economy are determined. The level and the rates of increase of the consumer price index is provided.