Chapter 2. Basics About Indicators and Business Cycles

In This Chapter

  • Understanding recessions and business cycles

  • How leading indicators give insight into business cycles

  • Economic data come in a variety of forms

  • Seasonal aspects of economic data

You’re ready to learn the basics about what causes recession and how indicators might give you warning. For you to appreciate the informational content of economic indicators, you need to understand that the economy goes through cycles of expansion and recession. And guess what? Some indicators have more forecasting ability than others, and a key one is the index of leading indicators.

By the time you finish this chapter, you will know what business cycles are and how number formats for indicators differ (and ...

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