Essay Direct and Indirect Signals of Retail Sales

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Pages: 5

1. Direct and Indirect Signals/Retail Sales A key aspect of economics is the collection and analysis of the vast amounts of data generated throughout global economies. The interpretation of this data can provide important signals for the future direction of the economy. There are two forms of signals that arise from the various economic data that is collected. The first are direct signals, which measure the movement in what is being measured. These usually take the form of a given macro indicator. The second type of signal is an indirect signal. These can be based on the perceived causation or correlation between two indicators. Indirect signals occur when one variable will tell something about another facet of the
Given that these issues are all interrelated, retail sales becomes an extremely important part of any economic model. By studying the correlations and causations between these variables, economists develop theories on the affects each of these variables will have on a given outcome. It is these from this data that they are able to make predictions of the future.

2. Henry Hazlitt and Inflation Pressures in the Kingdom of Bahrain

Henry Hazlitt’s economic lesson centers on the idea that decisions need to be taken into consideration not only for the short-term effects of any action but also the long-term consequences. Hazlitt also focused on the thought that decisions need to be made in regards to the consequences that all groups face as a result of the policy as opposed to a certain segment of the overall group. The Kingdom of Bahrain was faced with a difficult decision in that economic events outside of its control caused a rise in inflation. This rise had a large impact on the low-income citizens in their country. Although they were attempting to fulfill the responsibilities of any government in trying to ease the burden faced by their citizens, at what cost would these actions have on the rest of the country as well as their ability to correct the underlying problem. The central issue faced by the citizens of Bahrain was the affect of rising prices due to the inflation caused by the decline in