If a macroeconomic variable tends to aid in predicting the future path of real GDP,it is said to be a
A) convenient variable.
B) coincident variable.
C) leading variable.
D) lagging variable.

Question

Quizplus · Accepted Answer

A leading variable is one that tends to change before real GDP changes, and thus can be used to predict the future path of real GDP. Convenient variables are simply those that are easy to measure or obtain data on. Coincident variables change at the same time as real GDP. Lagging variables change after real GDP changes.

If a Macroeconomic Variable Tends to Aid in Predicting the Future