Which of the following macroeconomic variables is procyclical and coincident with the business cycle?
A)residential investment
B)nominal interest rates
C)industrial production
D)unemployment

Question

Quizplus · Accepted Answer

Industrial production is commonly procyclical, meaning it tends to rise during an expansionary phase of the business cycle and fall during a contractionary phase. Additionally, it is a coincident indicator, meaning its changes typically occur simultaneously with changes in the overall economy. The other options are not necessarily procyclical or coincident with the business cycle - residential investment may lag behind the cycle (i.e., decrease after the economy has begun to contract), nominal interest rates may reflect changes in inflation expectations as well as the cycle, and unemployment can be both procyclical and countercyclical depending on the state of the labor market.

Which of the Following Macroeconomic Variables Is Procyclical and Coincident