Chapter 5 · 5 of 100 marks · workbook pages 90-104

Economic Analysis

Micro and macro basics, the macro variables an analyst watches (national income, savings, inflation, rates, unemployment, FDI and FPI, fiscal and monetary policy, trade), trend types and data sources.

Chapter test
Focus
  • Micro and macro basics
  • National income
  • Inflation and interest rates
  • FDI/FPI
  • Fiscal and monetary policy
  • Trade and currency
Must know
  • Fiscal policy is driven by government spending and taxation; monetary policy is driven by the central bank through money supply and rates.
  • Inflation, interest rates, unemployment, exchange rates, trade deficit, savings, investment, FDI, and FPI affect company and market analysis.
  • Classify trends as secular, cyclical, or seasonal before linking them to forecasts.
Traps
  • FDI is long-term direct investment; FPI is portfolio flow.
  • A seasonal pattern is not the same as an economic cycle.
Chapter 4: Research basicsChapter 6: Industry