Business Cycle Indicators – Flashcards
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What is the Definition of an Economic Indicator
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An economic indicator refers to data or information that help describe and measure the current state of the economy.
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What is the purpose of an economic indicator?
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Indicators expose trends and help to forecast economic events in the future. They are considered when during decision making and planning.
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What is the definition of a leading indicator?
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Leading indicators are economic information that predict trends in economic activity before the direction becomes evident elsewhere.
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What are some examples of a leading indicator?
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• Stock market index • Building Approvals • Automotive orders • Applications for bank loans Confidence indexes Purchasing Managers Index (PMI)
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What is the definition of a co-incident indicator?
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A co-incident indicator is data from the last month. Co incident data moves in line with the level of economic activity.
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What are some examples of a co-incident indicator?
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• Retail Sales Car sales • Building Commencements Unemployment
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What is the definition of a lagging indicator?
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A lagging indicator is when information comes out well after the period it refers. Lagging indicators provide economic data that describes past levels of economic activity.
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What are some examples of a lagging indicator?
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• Economic Growth GDP • Inflation • Manufacturing Production Index • Import Indexes • Export Indexes • Current Account Deficit % of GDP
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What is a pro-cyclical indicator?
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Relationship indicator that moves in the same direction of economic activity. Example: GDP is a pro-cyclical indicator because it is a determinant of economic activity.
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What is a counter-cyclical indicator?
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Relationship indicator that moves in the opposite direction of economic activity. Example: Unemployment - as economic activity increases unemployment decreases
