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economic indicators

1. What major economic indicators would you examine if you were planning to make a large purchase and needed a loan? For example, think about buying a new car, some business equipment, or a house?

2. Describe how the Federal Reserve?s policy-makers influence interest rates. Explain the difference between expansionary and contractionary policies.

3. Do you think prospects for changes in Federal Reserve policy would affect your decision to make a purchase that requires financing? Explain.

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What major economic indicators would you examine if you were planning to make a large purchase and needed a loan? For example, think about buying a new car, some business equipment, or a house?

The most important indicator will be to observe the Federal funds rate, because it is the basis of all other interest rate in the economy. Since loan for making large purchase involves interest rate payments on the loan amount, it is essential to observe the trend and direction of interest rate in the economy before deciding on taking a loan for house, car. The interest rate will determine the size of the regular monthly ...

Solution Summary

1. What major economic indicators would you examine if you were planning to make a large purchase and needed a loan? For example, think about buying a new car, some business equipment, or a house?

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