How does the performance of the stock market affect individual businesses?

July 8, 2024 No Comments

A: The stock market affects individual businesses by influencing consumer spending and providing the chance for stronger returns on capital costs. Consumers spend more during bull markets because they feel wealthier when they see their portfolios rise in value. During bear markets, they pull back

How does the stock market affect gross domestic product (GDP)?

July 8, 2024 No Comments

A: The stock market affects gross domestic product (GDP) primarily by influencing financial conditions and consumer confidence. When stocks are in a bull market, there tends to be a great deal of optimism surrounding the economy and the prospects of various stocks. High valuations allow

How does the U.S. Bureau of Labor Statistics calculate the unemployment rate published monthly?

July 8, 2024 No Comments

A: The unemployment rate is one of the most closely followed indicators, used by businesses, investors and private citizens to gauge the health of the U.S. economy. Investor sentiment and consumer confidence have strong inverse relationships with the percentage of unemployed Americans. When the unemployment

How does the United States government measure economic growth?

July 8, 2024 No Comments

A: The most widespread measurement of national economic growth is gross domestic product, or GDP. The U.S. government collects and compiles economic data through the Bureau of Labor Statistics, or BLS. Once the data is organized, it is used by the Bureau of Economic Analysis,

How does total capital investment influence economic growth?

July 8, 2024 No Comments

A: An economy grows in only a few specific ways. People might find new or better resources, as with the discovery of oil wells in the 1850s. More people (or more productive people) might enter the workforce. Technology might be improved, as with the advent

How important are seasonal trends in the automotive sector?

July 8, 2024 No Comments

A: The automotive industry has some definite seasonal trends, with peak demand occurring in the spring and fall, and lowest sales in December, January and February. The auto industry is an important element of the entire U.S. economy. The automobile sales level is often seen

How does price elasticity change in relation to supply and demand?

July 8, 2024 No Comments

A: The price elasticity of a product describes how sensitive suppliers and buyers are to changes in price. It doesn’t change in relation to supply and demand, but it defines the slope of each curve. A product with high price elasticity of demand will see

How does quantitative easing in the U.S. affect the stock market?

July 8, 2024 No Comments

A: The Federal Reserve’s LSAP plan, or large scale asset purchases plan, also known as quantitative easing or QE, affects the stock market, but it is difficult to know exactly how or to what extent. Empirical evidence suggests there is a positive correlation between QE

How does specialization help companies achieve economies of scale?

July 8, 2024 No Comments

A: Economies of scale is an economic concept that describes growth in output such that the costs incurred during production are spread over an increased volume of production. When production increases, the per-unit fixed cost of production decreases. For example, if a pharmaceutical company develops

How does the Bureau of Labor Statistics determine the Consumer Price Index (CPI)?

July 8, 2024 No Comments

A: The Consumer Price Index (CPI) is determined by tracking price changes in a market basket of consumer goods and services over a period of time. The Bureau of Labor Statistics actually releases several different kinds of consumer price indexes on a monthly basis, but

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