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Quantitative and qualitative economic data

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Introduction

A level Essay Q5 O/N 07 The chairman of a national bank stated "It is important to rely on a range of qualitative and quantitative data to assess the economic health of the nation" Explain what data might be employed in this assessment and discuss how useful it is likely to be (25) Quantitative data is the use of numerical statistics to describe economic phenomena. It would use numbers to show trends, patterns and analysis of the economic health of the nation. Qualitative data would be data that relied on other factors or descriptors to describe the trends, patterns and analysis of the economic health of the nation. The first thing to state is that it is highly unlikely that the there would be simply quantitative data or qualitative data. The likelihood is that both data would be used together and the range of this qualitative and quantitative data would increase the clarity of the economic assessment of the nation. The most important data to be measured would be that which measured the standard of living in a country. ...read more.

Middle

For example a country whose balance of payments was permanently in disequilibrium may find it useful to enact expenditure switching policies to re-direct the spending within its economy away from imports towards its home produced goods and services as well as considering devaluation as a tool to enhance the attractiveness of its exports. There are quantitative and qualitative data that companies could be interested in. This would inform their level of investment and recruitment. For example profits and company growth and market share would show how business was performing. The cash balance sheets and gearing would also show whether businesses had capital to invest which may spur economic growth. Indeed one of the biggest determinants for companies for investment in the quantitative and qualitative measures on consumer confidence. This is defined as the degree of optimism on the state of the economy that consumers are expressing through their activities of savings and spending. Global consumer confidence is not measured. Country by country analysis indicates huge variance around the globe. In an interconnected global economy, tracking international consumer confidence is a lead indicator of economic trends. ...read more.

Conclusion

When the multiplier effects of both the increase or decrease in consumption as a result of an increase or decrease in property prices are factored in then we can see how useful this data is in explaining the increase or decrease in economic activity. Other asset prices such as share prices would also be included in this category although their effect on consumption may not be as large as the increases or decreases in property prices. In conclusion I have examined how it is important it is to use a range of qualitative and quantitative data in order to assess the economic health of a nation as there are many aspects of the data which gives a broader picture. Data such as GDP growth and HDI may be useful for measuring standards of living whilst other data such as unemployment and inflation rates may be better for assessing the performance of the government's macro-economic objectives. However data such as consumer confidence index and asset prices would inform us about the likely direction of consumption in the economy and its impact on economic activity. ...read more.

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