You Are Given Information About the Following Leading Indicators

question 37

Essay

You are given information about the following leading indicators. For each indicator explain whether the information suggests that a recession or expansion should be expected in the future.
a. Average initial weekly claims for unemployment insurance rise.
b. New building permits issued increases.
c. The interest rate spread between the 10-year Treasury note and the 3-month Treasury bill narrows.
d. The Index of Supplier Deliveries falls.

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Definitions:

Government Spending

The total amount of money that the government expends on goods, services, and public projects to provide for citizens or stimulate the economy.

Aggregate Spending

The total spending in an economy on domestic goods and services, including consumption, investment, government expenditures, and net exports.

Net Exports

Net Exports is the value of a country's total exports minus its total imports, representing the net effect of foreign trade on the economy.

Government Purchases

Expenditures by government entities for goods and services that directly consume economic output.