Economic Indicators

Question 1

What are the three economic indicators?

Answer 1

The three economic indicators are leading, lagging, and coincident.

Question 2

Define lagging indicator

Answer 2

• work to signal past events
• provide information about changes in the economy following changes occurring on the trade cycle.
• There is a lag between change in demand and decisions by business to change staffing
• These indicators are used most often in economics

Question 3

Define leading indicator

Answer 3

• Work to signal future events
• Provide information about changes in the economy in advance of it occurring on the
  trade cycle.
• Economists can forecast increases or decreases in demand
• Not always reliable and need to be confirmed by other indicators

Question 4

Define coincident indicator

Answer 4

• Work to signal concurrent events
• Provide information about changes in the economy at the same time as a change occurring on the trade cycle.
• Can used to confirm changes in leading indicators

Question 5

Give two examples of lagging indicator

Answer 5

GDP growth rates, business investments, inflation rates, unemployment rates, poverty rate are all acceptable

Question 6

Give two examples of leading indicator

Answer 6

Dwelling approvals and housing loan applications

Question 7

Give two examples of coincident indicator

Answer 7

Retail sailes, job advertisements

Question 8

Which economic indicator is the most reliable?

Answer 8

Lagging indicator