Business 101 Assignment

Topics: Economics, Monetary policy, Inflation / Pages: 2 (614 words) / Published: Mar 17th, 2015
Assignment on Economic Indicators

1. Housing starts lowest in months.
Bad news. Building new homes is a very important factor to helping our economy grow. When the number of new houses being built is declining, it could possibly put our economy back into a recession. This headline would mean there would be less labor jobs available for those people without a formal education (roofers, electricians, plumbers), and it would cause plumbing companies to have less business as well.
2. Fed lowers discount rate and interest rates tumble.
Good news. Raising the discount rate would make it more expensive to borrow money from the Fed which would lower the supply of money. Therefore, the lower the discount rate, there better for us. However, banks are affected by this because they would prefer that higher interest rates to make more money. Even though interest rates are low, there still aren't more people trying to get loans causing banks to get less business.
3. Retail sales up 4 percent over last month.
Good news. The more money people are spending, the more it helps our economy to grow and recover. As for small businesses, this would make them want to raise their prices so they can see more of a profit while people are spending money. Larger businesses, on the other hand, may lower prices or offer specials in order to insure that the people will keep shopping with them.
4. Business debt down from last year.
Good news. This headline shows that the economy is in fact improving each year. As both small and large businesses decrease their debt, it allows them to stay in business much longer. It also gives them the ability to start supplying more items or providing more services. Now they will be earning more of profit than before and customers will want to go to these businesses if they hear that their debt has gone down. It makes it obvious that the business has the potential and resources to survive an unpredictable job and economy.
5. Businesses are buying

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