SIE Exam Question 220: Answer and Explanation

Question: 220

Of the different types of economic indicators, which type acts to provide confirmation of the state of the economy based on indicators that occur for a period of time after a change in its direction occurs?

• A. Lagging indicators
• B. Coincident indicators
• C. Leading indicators
• D. All of the above

Correct Answer: A

Explanation:

Lagging indicators take effect after the new direction of economy takes effect, take hold for a period of time, and provide confirmation about that change. Coincident indicators are an immediate result of even slight changes in the economy. Leading indicators occur prior to the economic change and can be looked to in order to analyze the future state of the economy.