Simultaneous Equations - Essay Example

The consumer confidence index shows how people feel about the American economy. The index was set with a base in 1985 which represents the first year the index evaluated consumer confidence in the economy. In May 2008 the index had a value of 57.2, while in October 1992 the index had a value of 54.6. Both these time periods represent a position in time in which the country was facing recessionary forces. The value of the index states that people had more confidence in the economy in May 2008 than in October 1992.

If the consumer index was 62.8 in April 2008, this would imply that the citizens of the United States suddenly lost major confidence in the state of the economy in a short period of time. There was a negative change of 5.6 in the index between April and May.