Chapter 5 – Monetary Policy Summary

The objectives of this is to determine:

- Monetary policy
- Trade-offs
- Financial markets
- Global environment factors affecting monetary policy

Indicators of Economic Growth:

 Gross Domestic Product - this is the total amount of goods and/or services that are
made during a period
 National income – earnings of firms and individuals
 Unemployment rate – ensuring a low rate of this in a country
 Other indexes – this include index for industrial production, index for sales, index for
households

Leading Economic Indicator Indexes:

 Leading – future economic activity is predicted

 Coincident – tends to both reach troughs and peaks as cycle of their business
 Lagging – tends to go up or down later after business expansions