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

1.TRUE. A rise in planned inventories is a leading indcator of an expansion as it point towards the future progress.

2.FALSE. A rise in the unemployment rate is a concurrent indicator of recession as it shows current state of economy.

3.TRUE. As inflation rises,the GDP is also increases and also effects of inflation are not linear.

4.TRUE. Because as money supply increases, it results in inflation.

5.TRUE. In Australia the index of consumer sentiment is usually a leading indicator, as it comes under westpac leading economic index.