Economic Indicators

Unemployment

• Higher unemployment scares away potential companies

Labor Force participation rate

• the percentage of working-age people who are employed or actively seeking employment

Poverty

GDP

• gross domestic product

• the standard measure of the added value created through the production of goods and services in a country during a certain period

  • Limitations of GDP

    • Only monetary transactions

    • Shadow economy not included

      • operate entirely outside the tax and regulatory system

    • Measure of Nominal Value

      • Cost of living, taxes, etc…

        • Purchasing power parity (PPP): you can get more baskets in one country than you can in another with the same money

Big Mac Index

• provides a measure of citizens purchosing power across different countries

• index has been calculated by the UBS bank since 1970

• index is calculated by dividing the price of a big mac by the net hourly wage in different cities around the world

Gini coefficient

• Demonstrates how groups of population holds different amounts of wealth

• 0 < gini < 1

  • 1 = 1 person holds all the income

  • 0 = everyone has an equal income

    • better for companies selling to general population