Question

(a)Explain the usefulness of lead variables in macroeconomic forecasting (b) Compare the Bretton Woods Vis-a-vis the unconventional monetary policy adopted by the Central Bank of Nigeria in stabilizing the Nigerian economy

Answer 1

Ans-(a)Lead variables in macroeconomics plays a significant role in macroeconomics forecasting these lead variables are:-

1.Measurement of Economic Output

2. Tracking the unemployment rate

3.Watching the inflation rate

4. Monitoring the interest rate

Uses of these variables are:-

Helps in formulating policies

Helps in economic stability

Helps in tackling the economic problems

Ans-(b)Bretton Wood system doesn't play a significant role in bringing stabilizing the economy as compared to unconventional source i.e. Managed floating or Flexible exchange rate system.

It refers to deciding the exchange rate on the basis of market forces i.e supply and demand.

It provides flexibility to the nation.