Give two examples of economic indicators, each of a different type (leading, coincident, or lagging). Explain what type of economic indicator it is and how it is used to analyze economic activity.
What will be an ideal response?
Answers to this question will vary. Students should present two different economic
indicators and correctly identify the type, such as the S&P 500 index as a leading
economic indicator and the Consumer Price Index (CPI) as a lagging economic
indicator. Students should explain how each one works. For example, the S&P 500
index often turns downward before a recession and usually begins to improve before
the economy recovers from a slump. The Consumer Price Index (CPI) could be used to
confirm the beginning or end of a recession by showing deflation or an increase in the rate of inflation.
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A) increase the U.S. current account. B) decrease the U.S. current account. C) increase the U.S. capital and financial account. D) decrease the U.S. capital and financial account.