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.

Question

Quizplus · Accepted Answer

Constructing and using an index of leading variables can be a reliable method for forecasting the future path of real GDP as it takes into account the correlation between economic indicators that have historically preceded changes in GDP. However, it should be noted that no forecasting method can provide perfect predictions and unexpected events may still impact the actual path of GDP.

Forecasting the Future Path of Real GDP by Exploiting Past