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Suppose You Are an Advisor to the Business Cycle Dating

question 157

Essay

Suppose you are an advisor to the Business Cycle Dating Committee.You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year.Which data do you look at? How does the economy behave at the onset of a recession?


Definitions:

Normal Curve

A symmetrical, bell-shaped curve representing the distribution of a set of data where most measurements are close to the average.

Symmetry

The property of being made up of exactly similar parts facing each other or around an axis; often evaluated in statistical data sets.

Normal Distribution

A symmetrical, bell-shaped distribution of data wherein most observations cluster around the central peak and probabilities for values taper off equally in both directions.

Mean

The arithmetic average of a set of values, calculated by summing all the values and then dividing by the number of values.

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