What are some of the problems with using the leading indicators to forecast recessions? If you were a policymaker, would you rely on them?
What will be an ideal response?
Although the leading indicators seem to be useful for forecasting the future state of the economy, there are a number of problems in using them. First, the data is usually revised, sometimes substantially, so a signal from the leading indicators may be reversed later. Second, they sometimes give incorrect signals. Third, they don't provide much information on the severity or exact timing of the coming recession. Finally, structural changes in the economy mean the set of indicators must be revised periodically. Policymakers should use the leading indicators as additional information, but should not rely on them alone.
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Producer surplus is the ________ summed over the quantity produced
A) price of the good minus the marginal cost of producing it B) marginal benefit of the good minus its marginal cost C) marginal benefit of the good minus its price D) marginal cost of the good minus the opportunity cost of producing it E) None of the above answers is correct.
A farmer sells $25,000 worth of apples to individuals who take them home to eat, $50,000 worth of apples to a company that uses them all to produce cider, and $75,000 worth of apples to a grocery store that will sell them to households. How much of the farmer's sales will be included as apples in GDP?
a. $25,000 b. $150,000 c. $100,000 d. $125,000