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Paul [167]
3 years ago
6

List five of the most widely followed indicators of the economy.

Business
1 answer:
Kobotan [32]3 years ago
3 0

Answer:

1. Gross Domestic Product

GDP represents the market value of all final goods and services produced within a country during a given period. The figure is usually given in nominal and real formats, with real GDP adjusting for changes in monetary value. Given its vast breadth, this indicator is among the most-watched by the financial markets.

The expansion of a country's GDP is indicative of a growing economy, while a contraction in GDP indicates a slowdown in a country's economy. Meanwhile, a country's projected GDP growth rate can be used to determine an appropriate level of sovereign debt or determine if companies operating within the country are likely to experience growth.1

2. Employment Indicators

The productivity and wealth of a country's citizens is arguably the ultimate determiner of economic success. Employment indicators, such as labor force, payroll, and unemployment data estimate how many citizens are employed and whether they are making more or less money than before.

The financial markets carefully watch these employment indicators, especially in developed countries that generate most of their income from domestic consumer spending. A fall in employment is often followed by a fall in consumer spending, which can hurt GDP statistics and overall economic growth prospects.2

3. Consumer Price Index

CPI measures changes in the prices of consumer goods and services that are purchased by households. The index is a statistical estimate created by using prices from a sample of representative items collected periodically. Often times, this measure is used as a gauge of inflation, which can positively or negatively affect a country's currency.3

The financial markets carefully watch CPI figures for signs of inflation. Rising inflation can lead to higher interest rates and reduced lending, while deflation can lead to lower interest rates and greater lending.4

4. Central Bank Minutes

Central banks create monetary policy and exert significant control over a country's economy. Consequently, the financial markets tend to listen closely to every word that central bankers utter publicly for clues about the future. Central bank minutes are formal releases that contain valuable economic commentary that can signal future policy action.5

In the U.S., the Federal Reserve issues what's called the Beige Book, which contains anecdotal information about current economic conditions from each Federal Reserve Bank. Similar notes are released by many other central banks, including the Bank of Japan, European Central Bank (ECB), and others on a regular or semi-regular schedule.6

5. PMI Manufacturing & Services

The Purchasing Manager's Index (PMI) is an economic indicator developed by Markit Group and the Institute for Supply Management. By polling businesses on a monthly basis, the index reflects the acquisition of goods and services by purchasing managers. The two most important surveys are the PMI Manufacturing and PMI Services indices.

The financial markets watch the PMI Manufacturing and PMI Services indices as key leading economic indicators because companies stop purchasing raw materials when demand dries up. This can indicate problems in an economy much before other reports like retail sales or consumer spending

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Duncan Company reports the following financial information before adjustments. Dr. Cr. Accounts Receivable $100,000 Allowance fo
Angelina_Jolie [31]

Answer:

  • Duncan Company estimates bad debts at   (a) 5% of accounts receivable

Dr Bad Debt Expense                             $ 3.000

Cr Allowance for Uncollectible Accounts $ 3.000

  • (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $1,500 debit balance.  

Dr Bad Debt Expense                            $ 6.500

Cr Allowance for Uncollectible Accounts $ 6.500

Explanation:

 

Initial Balance  

Sales Revenue (all on credit)         $ 900,000

Less: Sales Returns and Allowances $ 50,000

Estimates bad debts 5%

Dr Accounts Receivable                       $ 100,000

Cr Allowance for Doubtful Accounts $ 2,000

When the company estimates the bad debts, the journal entry is the loss to the income statement through the account Bad Debt Expense and the record in the Allowance for Uncollectible Accounts as a credit to deduct from Accounts Receivable in the Balance Sheet.

The entry it's less than the estimated value of 5% because the account "Allowance for Doubtful Accounts" had a balance of $2,000 on Credit.

Duncan Company estimates bad debts at   (a) 5% of accounts receivable  

Dr Bad Debt Expense                            $ 3,000

Cr Allowance for Uncollectible Accounts $ 3,000

The new balance on Allowance for Doubtful Accounts as Debit of $1,500 means that when the entry of the adjustment is recorded it's necessary to compensate that value to show a  debit balance of $5,000., because the Allowance for Doubtful Accounts must reflect a credit balance.

(b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $1,500 debit balance.  

Dr Bad Debt Expense                            $ 6,500

Cr Allowance for Uncollectible Accounts $ 6,500

Accounts Uncollectible are those credit that the company give and there are not chances of been collected.

When the customers buy products on credits but then the company can't collect the debt, then it's necessary to write off the unpaid bill as uncollectible.

One way it's to write-off directly the bad debts at the moment decided that the credit are uncollectible, the total amount it's reported as bad debt expenses which affect negativly the income statement and the accounts receivable are reduced in the same amount, less assets.

The other way it's to determine a percentage of total amount of accounts receivables as uncollectible, exist many ways to analize the accounts receivable and figure the value of uncollectible.

When the company have the percentage of uncollectible accounts the journal entry required is Bad Expenses (debit) with Allowance for Uncollectible Accounts (credit)

At the moment of the write-off as the expenses were before recognized we only use the Allowance for Uncollectible Accounts (Debit) with Accounts Receivable (Credit), with this we are recognizing the uncollectible credit of the company.

7 0
3 years ago
The cash used to make change when customers pay for their purchases in cash is an example of the _____ motive for holding cash.
PIT_PIT [208]

It should be noted that the cash that's used to make purchases as illustrated is the transactionary motive of holding money.

A financial transaction simply means an agreement that takes place between the buyer and the seller. It is the exchange of goods or services.

The transactionary motive of holding money simply means holding money in order to meet daily financial needs such as buying goods.

Read more about cash on:

brainly.com/question/25772299

8 0
2 years ago
Salma bought a new car by getting a loan from a bank. If she fails to pay back the loan, the bank will claim the car. In this sc
Alenkasestr [34]

The answer is collateral.

A valuable object is used as collateral to secure a loan.

Lenders' risk is reduced by collateral.

The lender has the right to sell the collateral if a borrower defaults on the loan in order to recover its losses.

Two examples of collateralized loans are mortgages and auto loans.

You can utilize other personal belongings, like a savings or investment account, to protect a collateralized personal loan.

The sort of loan frequently dictates the kind of collateral.

Your house serves as collateral when you take out a mortgage. If you obtain a car loan, the vehicle will serve as collateral.

Cars but only if they are fully paid off bank savings deposits, investment accounts, and other sorts of collateral are frequently accepted by lenders.

Retirement account collateral is typically not accepted.

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8 0
2 years ago
If the number of unemployed workers is 19 million, the number in the working-age population is 2) 500 million, and the unemploym
Sunny_sXe [5.5K]

Answer:

D) 475 million

Explanation:

Unemployment is the people who is not currently working and searching for the job. These are the part of Labor force. So unemployment rate is as follows:

Unemployed Worker = 19 million

Unemployment rate = 4%

Unemployment rate = Unemployed worker / Labor force

4% = 19 million / Labor Force

Labor Force = 19 million / 4%

Labor Force = 475 million

6 0
3 years ago
Jim receives a copy of a proposal for a new radio station in his town. From the information, he learns the potential for profits
Anastaziya [24]

Jim is analyzing the <u>prospectus </u>through which he learns about the potential for profits, the risk involved, and the capital that is needed to become a shareholder of a company.

<h3>What is the significance of the prospectus?</h3>

It is crucial for an investor to get as a good deal of data as feasible approximately a funding earlier than placing your money into any company. One of the files provided through many businesses is the <u>prospectus. </u>

The prospectus presents you with data approximately the funding and allows you're making a knowledgeable choice as an investor.

Therefore, Jim is analyzing the <u>prospectus </u>through which he learns about the potential for profits, the risk involved, and the capital that is needed to become a shareholder of a company.

Learn more about <u>the prospectus:</u>

brainly.com/question/27245796

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8 0
2 years ago
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