Economic indicators like the unemployment rate and the average duration of unemployment, which tend to change after real GDP changes, are called A) leading

Business Dec 23, 2020

Economic indicators like the unemployment rate and the average duration of unemployment, which tend to change after real GDP changes, are called

A) leading.

B) lagging.

C) coincident.

D) structural.

Expert Solution

The answer is B).

An economic indicator is leading if the change in economic indicator occurs before the change in real GDP. The indicator is lagging if the change in economic indicator occurs after the change in real GDP. Since unemployment rate and average duration of unemployment tend to change after real GDP changes, they are lagging indicators.

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