A3-M1 Economic Factors

Question 1

What are leading indicators?
predict the economy

Answer 1

1. average weekly unemployment insurance initial claims
2. bond yield curve
3. interest rate spreads (10-year treasury bonds versus federal funds rate): federal increase/decrease interest rate to intervene the economy
4. the producer price index (PPI)

Question 2

what are coincident indicators?
provide information about the current state of the economy

Answer 2

1. industrial production
2. manufacturing and trade sales
3. gross domestic product (GDP)

Question 3

what are lagging indicators?
follow economic activity

Answer 3

1. average duration of unemployment
2. consumer price index (CPI) for services