Question
1)Economic data and the signals they contain are central to business conditions analysis.Economists focus on direct signals and indirect or causal signals.First, explain with examples
1)Economic data and the signals they contain are central to business conditions analysis.Economists focus on direct signals and indirect or causal signals.First, explain with examples that relate to United itself or its industry what is meant by a "direct signal" and then what is meant by an "indirect signal".To illustrate the point further consider the very important macro indicators of employment and the wages that employment generates. To make it interesting let's consider a different country - one which United serves though its partner Gulf Air - the Kingdom of Bahrain.Several years ago Bahrain, like other developed Middle East producers of energy, went through some interesting times. Combining issues with Iran with softness in energy prices the economy was unsettled; he period of 2015-17 was especially unsettled. According to the Bahraini Labour Market Regulatory Authority's quarterly reports we have the following data regarding working Bahraini citizens (one BD, or Bahraini dinar, equals $2.67):
Indicator
2015Q3
2016Q3
Employment
158,426
157,426
Median Monthly Wage, Private
BD396
BD382
Median Monthly Wage, Public
BD685
BD673
Inflation, Year over Year
2.7%
Your job is to speculate on the various direct and indirect macroeconomic signals that may be contained in these data.When it comes to direct signals, tell me explicitly what the direct signals are about employment and wages and be sure to distinguish between real and nominal changes.When speculating on the indirect signals a United analyst could get from these data focus on what these data could mean for households (your customers), firms (your franchisees) and even the government.If it would help, assume for the moment you are a Bahraini who runs a restaurant - what might these data mean to you, your business and your household's economic behavior and what would that behavior do to the economy as a whole?
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