Forecasting the future path of real GDP by exploiting past statistical relationships
A) is never very reliable.
B) can be accomplished by the construction and use of an index of leading variables.
C) can be accomplished by the construction and use of an index of lagging variables.
D) can be accomplished by the construction and use of an index of coincident variables.
E) can only be accomplished if there is a perfectly positive correlation.

Question

Quizplus · Accepted Answer

Constructing an index of leading variables is a common technique used to forecast the future path of real GDP by exploiting past statistical relationships. This approach uses a combination of economic indicators that have historically preceded changes in real GDP. While it is not always perfectly accurate, it is generally more reliable than trying to forecast based on a single variable or a more simplistic approach.

Forecasting the Future Path of Real GDP by Exploiting Past