the stock market and the economy can you forecast the future n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
The Stock Market and the Economy: Can You Forecast the Future? PowerPoint Presentation
Download Presentation
The Stock Market and the Economy: Can You Forecast the Future?

Loading in 2 Seconds...

play fullscreen
1 / 5

The Stock Market and the Economy: Can You Forecast the Future? - PowerPoint PPT Presentation


  • 58 Views
  • Uploaded on

Lesson 16. The Stock Market and the Economy: Can You Forecast the Future?. Slide 16.1. Lesson 16 – The Stock Market and the Economy: Can you Forecast the Future?. A Business Cycle.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'The Stock Market and the Economy: Can You Forecast the Future?' - shino


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
a business cycle

Slide 16.1

Lesson 16 – The Stock Market and the Economy:

Can you Forecast the Future?

A Business Cycle
  • Expansion: The economy is growing. GDP, income, and employment increase. Consumption and investment increase. Businesses are expanding. Interest rates may rise. There may be concerns about inflation.
  • Peak: The high point of the expansion, and also a turning point. After the peak, an economy begins to contract.
a business cycle cont

Slide 16.2

Lesson 16 – The Stock Market and the Economy:

Can you Forecast the Future?

A Business Cycle (Cont.)

Contraction: The economy is declining. GDP, income, and employment decrease. Consumption and investment decrease. Business sales decline. Interest rates and prices my fall.

Trough: This is the low point of the contraction, and also a turning point. After a trough, the economy begins to expand.

Recession: A period of significant decline in total output, income, and employment, usually lasting from six months to a year.

how do stock prices affect the economy

Slide 16.3

Lesson 16 – The Stock Market and the Economy:

Can you Forecast the Future?

How Do Stock Prices Affect the Economy?

Stock prices affect consumption.Increases in stock prices mean that shareholders are wealthier. Increased wealth leads to increased consumption. Decreases in stock prices means that shareholders are poorer, and this decreases consumption.

Stock prices affect investment.Increases in the price of a stock means that the value of the corporation has increased. This increased value leads to increased investment and business expansion. Decreases in the price of a stock mean that the value of the corporation has decreased. This decreased value may discourage investment and business expansion.

how do stock prices affect the economy cont

Slide 16.4

Lesson 16 – The Stock Market and the Economy:

Can you Forecast the Future?

How Do Stock Prices Affect the Economy? (Cont.)

3. Stock prices affect expectations.When stock prices increase, investors feel optimistic about the future of the economy. This optimism may lead to more spending and more production. When stock prices fall, investors may feel pessimistic about the future of the economy. This pessimism may cause them to hold back on spending and production.

Stock prices are a leading indicator of economic activity.A leading indicator is a statistic that often changes in advance of real GDP changes. Persistent increases in stock prices often precede increases in GDP and economic expansion by a few months. Persistent decreases in stock prices often precede declining GDP and recession by a few months.