ECONOMIC

Indices and Economic Indicators

Indices and Economic Indicators

Introduction

Economic indicators - is the value or characteristics, showing the state of the economy. Their dynamics is given by the statistical next calculated, usually weekly, monthly or quarterly values, which helps to detect trends in the economy and predict its future. Short-term processes and phenomena that affect the state of the economy are very diverse. Some of them are repeated regularly at certain times of the year, such as a sharp increase in retail sales before the New Year.

Indices and Economic Index

Indices are referred as the plural form of index, where it relates the subjects on which the subjugation of each topic is ventured. Indices are being used in various subjects for different methods and formulations. The best regards are given to the indicators of the economy, which helps to determine the various subjective and non-subjective issues of the economy of the industry and states.

In the definition for the economic theory, it is statistic constructed to measure specific aspects of economic activity, which is possible objectively. Econometric is used for the evaluation and analysis of the correlations with other variables.

The system of the control panel is used to build the indicators through the aggregation of evidence. There are various agreements, which reflect the priorities and values, ethical and moral issues, derived through constructions of these indicators. The most common indicators are the Gross Domestic Product (GDP) and Gross National Product (GNP), which are in use on a continual basis after the Second World War.

Types of Indicators

There are various formats available for the measurement of economic data through indicators, but most important fall under the seven categories as;

Total Output, Income, and Spending

Employment, Unemployment, and Wages

Production and Business Activity

Prices

Money, Credit, and Security Markets

Federal Finance

International Statistics

These statistics helps to create the vivid picture of economy, and performances. Two of these indices are discussed below;

Gross Domestic Product (GDP)

The GDP (Gross Domestic Product) is a leading indicator of the development potential of a country's economy. GDP estimates the significance (sum) of all wealth (goods, products and services) produced by a country in a given period, usually one year. This includes the roll up to the luxury items in the country, as well. It is also considered as the indicator of country standard of living, as well.

There are various factors that directly manipulates the change in GDP is domestic consumption. The increase in expenditure of the common man consequently increases the GDP. GDP has direct relation with consumption patterns of the common man. Consumption depends on wages and interest. If people earn more, pay less in interest, then the consumption is higher and the GDP grows. With low wages and intense interest, personal spending and GDP falls too. So the interest hinders the growth of the country. Business investments also influence the GDP. If companies grow, buy machines, activities expand, hire employees, they move the economy. Government spending is another factor driving GDP. Work for an increase in infrastructure like building a road, workers are hired, and the spend is done ...