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NEW QUESTION: 1
Some economic indicators lead the economy into a recovery or recession, and some lag it. An example of a lag variable is:
A. Housing starts.
B. Chronic unemployment.
C. Orders for consumer and producer goods.
D. Consumer expectations.
Answer: B
Explanation:
Economists use a variety of economic indicators to forecast turns in the business cycle. Economic indicators are variables that in the past have had a high correlation with aggregate economic activity. The best known are the composite indexes calculated by The Conference Board, a private research group with more than 2,700 corporate and other members worldwide. Indicators may lead, lag, or coincide with economic activity. The Conference Board's lagging indicators include average duration of unemployment in weeks, the change in the index of labor cost per unit of output, the average prime rate charged by banks, the ratio of manufacturing and trade inventories to sales, the commercial and industrial loans outstanding, the ratio 'of consumer installment credit outstanding to personal income, and the change in the CPI for services.

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