Economic Indicators of the Business Cycle

Question 1

Economic Indicators of the Business Cycle

Answer 1

Measure how well an economy is doing (3 types)

Question 2

3 types

Answer 2

1. Leading
2. Lagging
3. Concident

Question 3

Leading

Answer 3

• Predict where the economy is headed
• These indicators adjust before the economy experiences a change and predict where the economy is going.
• These indicators help guide investors, businesses and governments to act according to what is about to happen

Question 4

Lagging

Answer 4

• Do not adjust until after the economy has experienced a change.
• It may take two or three quarters of economic change to influence a lagging indicator

Question 5

Coincidence

Answer 5

Move in conjunction with the business cycle.
Example: When economies are slumping, countries do not import as many goods and services
When the economy is strong, countries are able to purchase more goods from other countries