Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 31

Current Economic Information; Use of the Internet There are a number of sources of economic and demographic information that can assist the management accountant. The information includes financial information such as interest rates, employment, income, international trade, output of goods and services, consumer price levels, and market values of stocks and bonds. The management accountant uses this information to better understand the environment in which his or her firm competes. For example, when interest rates are moving up (or down) rapidly, the management accountant will want to consider the effect of the interest cost changes on his or her analysis and recommendations regarding managing cash flow, introducing new products, improving or expanding production facilities, and so on. There are many sources for this information; two useful sources are shown below:

White House Summary of Statistical Information: www.whitehouse.gov/fsbr/esbr.html

New York Stock Exchange: www.nyse.com

Required

Review only the White House statistics for international, output, and production statistics. Comment on the current state of the economy that you see in these statistics, in 200 words or less.

Step 1 of 10

Recession:

Recession is normally the difference among the top period and the trough period. It’s a slowdown in the economic activities. An important drop-down in the spending of the customers normally leads the recession. In the situation of the recession economic indicators like GDP, employment, corporate gains, etc, drop down.