The index of leading economic indicators:
a. provide accurate information on the duration of downturns in the economy
b. virtually always predicts downturns in the economy with a lead time of six months.
c. can result in a self-fulfilling prophecy if business firms respond to leading economic indicator predictions.
d. provide accurate information on the depth of downturns in the economy.
c
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A doctor sets up a private practice in small town where he faces no other competitors. In spite of his monopoly position why is he not guaranteed to make a profit?
What will be an ideal response?
Refer to the diagram, where T is tax revenues and G is government expenditures. All figures are in billions of dollars. If the full-employment GDP is $400 billion while the actual GDP is $200 billion, the cyclically adjusted budget deficit is:
A. $40 billion.
B. zero.
C. $60 billion.
D. $20 billion.