Unemployment is referred to as a lagging indicator because
A) it tends to stay high for many months after output stops declining during a recession.
B) reports on unemployment statistics tend to lag behind reports on inflation statistics.
C) it takes time to collect information regarding unemployed individuals..
D) it indicates economic activities from the year before.
A
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An increase in the real interest rate will
a. increase the inflationary premium. b. decrease the inflationary premium. c. increase the price of current consumption relative to future consumption. d. decrease the price of current consumption relative to future consumption.
The Federal Reserve's policy to "lean against the wind" means
A. when output and/or the price level are low, the Fed sets a low interest rate to stimulate the economy. B. that the Federal Reserve chairman will oppose Congress' pressure to raise interest rates. C. when output and/or the price level are high, the Fed sets a high interest rate to rein the economy in. D. that the Fed will lower the interest rate to rein in the economy.