Question

Which definition below corresponds to economic indicators?

• The movement of the market through periods of expansion and recession, peaks and troughs

• The movement of money in and out of a country or other entity

• Data that indicates past, present and future activity

• Exchange transactions that occur across nations

Answer 1

Answer : (c) Data that indicates past, present and future activity.

Economic indicators helps to understand the future trajectory of the economy. It is a statistic about economic activity.It helps in analyzing the economic performance in the past and current levels and predicts future performance. It is mainly applied in the field of business cycles.

It is measured in macroeconomic terms and are often released periodically by governments or leading organization across the globe.

Types of Indicators

• Lagging indicators analyses the past economic performance.
• Leading indicators predicts future performance of the economy.
• Coincidental indicators studies current levels of economy.

Examples of indicators

Gross Domestic Product (GDP), Unemployment Rates, Gross National Product (GNP), Retail Inflation or Consumer Price Inflation (CPI), Wholesale Price Inflation (WPI), etc.