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NORMAL GOOD: A good for which an increase in income causes an increase in demand, or a rightward shift in the demand curve. If demand increases as income increases, it is a normal good or a good with a positive income elasticity of demand. A normal good is one of two alternatives falling within the income determinant of demand. The other is an inferior good.
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Lesson 12: Business Cycles | Unit 3: Measurement
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Page: 13 of 26
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Leading economic indicators indicate business-cycle activity 3 or 12 months ahead. If leading indicators decline now, then the economy is likely to decline in 3 to 12 months.- Leading indicators are eleven statistics that precede changes in the economy.
- Three notable leading indicators are stock market prices, the money supply, and consumer confidence.
- The Composite Index of Leading Indicators, displayed in this chart, combines all eleven into a single number.
- The Composite Index works better than individual indicators, but they are not perfect. Some declines not followed by a contraction.
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CORPORATION A business established through ownership shares (termed corporate stock) with limited liability of company debts by the owners. A corporation is considered a distinct legal person, separate from its owners. As such, the owners have limited liability. They are only liable for the value of the ownership share and cannot be held personally responsible for any corporate debts. A corporation is one of the three basic forms of business organization. The other two are proprietorship and partnership.
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The Dow Jones family of stock market price indexes began with a simple average of 11 stock prices in 1884.
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"Man is born to live, not to prepare for life. " -- Boris Pasternak, writer
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RJE
RAND Journal of Economics
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