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macroeconomic indicators

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1. Identify and justify the macroeconomic measures of output and prices which you have selected for Big Drive Auto's planning.

2. What are the relationships between the organization's data and the macroeconomic measures you have selected?

3. How would you get reliable forecasts of these macroeconomic variables?

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I have included some data in an attached document. It is the same file that I sent to you earlier, but with additional information on some topics while some data has been removed.

1. The macroeconomic measures of output and prices that affect Big Drive Auto's planning are real GDP, personal consumption expenditure, the unemployment rate, the average inflation rate, and the interest rate. Included is the data on all these components for all years from 1998-2007. The reason for including these variables are obvious.

Higher real GDP means an average American is better off than earlier, has more income, and is more likely to spend the additional income on goods and services. If you have a good job you tend to take good care of your automobiles, and tend to buy new cars more frequently. On the other hand if the GDP is falling, chances are your income will fall, and so will your demand for goods and services, thus affecting the sale of Big Drive Auto.

The reason for including personal consumption expenditure, which is a part of the real GDP, is the same as above. But, what this parameter does is it eliminates the impact of firm and government expenditure on ...

Solution Summary

Various macroeconomic indicators are investigated.