Question

A leading indicator: Group of answer choices does not change with business cycles. remains unaffected by changes in real GDP. generally changes after real GDP changes. changes in either direction before a recession starts. usually declines before a recession starts.

Answer 1

Answer:

The correct answer is letter "E": usually declines before a recession starts.

Explanation:

The Leading Indicator is a measurable economic factor that tends to change right before the economy begins to change. Though they are not always right, leading indicators are often used to forecast upward or downward shifts in an economy or a sector.

Some of the common key indicators are the stock market, retail sales, and the real estate market. If we relate the inflation to leading indicators, inflation will theoretically hit right after the leading indicator started to show a decline in the overall growth of an economy.