Discussion Questions- Week 4
What is the economy’s current stage in the business cycle? Support your answer with an article written within the last week from the popular press or blog. In light of the text readings, evaluate the article and the source of the article. Based on the information, determine where the economy fits in the business cycle. [Objective 4.1] *
* There are differing views as to where the economy’s current stage in the business cycle is and as is common in politics, the speeches are always suited to the audience as and when required. However, the best way to judge the current stage is to take a specific trend that is always impacted during a peak or a recession. For the purposes of this example, we are taking the foreclosures in Tucson as an indicator of economic health for the common man. * In the presentation of figures for this, the current stage for political purposes is described as being in the expansion phase after the recession trough has been reached. * The statistics presented in this Sunday’s Arizona Daily Star, however, present the picture in a totally different manner based on actual data collected for different areas in Tucson. * Based on the statistics presented in the article, even though number of foreclosures has declined considerably since the start of the recession, we have still not reached the level from where an upward swing can start again. As such, even though we are close to the recession trough and the slope of the graph continues to decrease, we still haven’t reached the stage where the slope become zero and then becomes positive again. * In addition to the mathematical analysis, the mood of the consumer as well as the banks also confirms the above. Bank Rates continue to come down little by little but still haven’t reached the typical lows that depict a healthy economy with customers being able to pay mortgages and other dues in time. * All of the factors above confirm that the...
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