The index of leading economic indicators:
A)provide accurate information on the duration of downturns in the economy.
B)virtually always predicts downturns in the economy with a lead time of six months.
C)can result in a self-fulfilling prophecy if business firms respond to leading economic indicator predictions.
D)provide accurate information on the depth of downturns in the economy.

Question

The index of leading economic indicators:
A)​provide accurate information on the duration of downturns in the economy.
B)​virtually always predicts downturns in the economy with a lead time of six months.
C)​can result in a self-fulfilling prophecy if business firms respond to leading economic indicator predictions.
D)​provide accurate information on the depth of downturns in the economy.

Quizplus · Accepted Answer

The index of leading economic indicators can result in a self-fulfilling prophecy if business firms respond to leading economic indicator predictions. While it is an important tool for predicting the direction of the economy, it is not always accurate and does not provide information on the duration or depth of downturns in the economy.

The Index of Leading Economic Indicators