Question

Set Seven

1. A rise in planned inventories is a leading indicator of an expansion.

Indicate     T   F    #

Explanation: [Limit 40 words: 2 marks]

2. A rise in the unemployment rate is a concurrent indicator of a recession.

Indicate     T   F    #

Explanation: [Limit 40 words: 2 marks]

3. Published data show that during the previous quarter (3 months) employment has risen that demand-pull inflation is rising. These indicators suggest that the growth of GDP is likely to increase in this or the next quarter.

Indicate     T   F    #

Explanation: [Limit 40 words: 2 marks]

4. A good leading indicator of changes in the rate of inflation during economic cycles is the change in the growth rate of the money supply.

Indicate     T   F    #

Explanation: [Limit 40 words: 2 marks]

5. In Australia the index of consumer sentiment is usually a leading indicator.

Indicate     T   F    #

Explanation: [Limit 40 words: 2 marks]

Answer 1

Question-A rise in planned inventories is a leading indicator of an expansion.

Answer- True, as because expansion is a phase when economy is recovering and money is cheap to borrow so people start spending and businesses start building up inventories and eventually GDP rises and unemployment also decreases.

Question- A rise in the unemployment rate is a concurrent indicator of a recession.

Answer- True, because with the onset of a recession businesses production costs increases and Revenues declines or become stagnant so inorder to clear their debts businesses starts terminating workers in order to cut their costs.

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