CA Foundation P4 · Chapter 6 · Question 3 of 15
Which of the following is generally regarded as a leading indicator of economic activity?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Stock market prices
Explanation
Leading indicators change before the economy as a whole changes; examples include stock prices, new orders for capital goods and building permits. GDP and personal income are coincident indicators, while the unemployment rate is typically a lagging indicator.
More Business Cycles MCQs
- Q5Which of the following is a characteristic of the depression phase?
- Q6According to Keynes, business cycles are caused mainly by:
- Q7The view that the trade cycle is 'a purely monetary phenomenon' caused by expansion and contraction of bank credit is associated with:
- Q8According to Schumpeter, business cycles are caused by:
- Q9The theory that business cycles result from waves of optimism and pessimism among businessmen is associated with: