CSC EXAM 1 Questions and Answers
Leading Indicators
Tend to peak and trough before the overall economy & help investors anticipate emerging trends in economic activity. Anticipate change by indicating what businesses and consumers have actually begun to produce and spend:
- Housing Starts
- Man...
coincident indicators change at approx the same ti
leading indicators tend to peak and trough before
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CSC EXAM 1 Questions and Answers
Leading Indicators - answer Tend to peak and trough before the overall economy &
help investors anticipate emerging trends in economic activity. Anticipate change by
indicating what businesses and consumers have actually begun to produce and spend:
- Housing Starts
- Manufacturer's new orders
- Commodity Prices
- Avg hours worked per week
- Stock prices
- The money supply
Coincident Indicators - answer Change at approx the same time and in the same
direction as the whole economy & are useful for providing info about the current state of
the economy:
- Personal income
- GDP
- Industrial Production
- Retail sales
Lagging Indicators - answer Change after the economy as a whole changes & useful
of confirming that a change to a long term trend has occurred:
- Unemployment
- Private sector plant and equip spending
- Business loans and interest on such borrowings
- Labour costs
- Inflation rate
Expansion - answer - Inflation is stable
- Businesses have adjusted inventories to meet higher demand and are investing in new
capacity to meet increase demand
- Corporate profits are rising
- New business start ups outnumber failures
- Stock market activity is strong
- Job creation is steady and the unemployment rate is steady or falling
Peak - answer Final stage of the expansion
- Demand outstrips supply
- Labour and product shortages cause wage increases and inflation to rise
- Interest rates rise and bond prices fall
- Business sales decline
- Stock prices and activity falls
Contraction - answer - Real GDP decreases
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