Which of the following is a lagging economic indicator?
A) the unemployment rate
B) unsold goods
C) a decline in new home purchases
D) an increase in new car purchases

Question

Which of the following is a lagging economic indicator?  
A) the unemployment rate 
B) unsold goods 
C) a decline in new home purchases 
D) an increase in new car purchases

Quizplus · Accepted Answer

The unemployment rate is a lagging economic indicator because it tends to change after the economy has already shifted. An increase in unemployment means that the economy has already taken a hit, while a decrease in unemployment tends to happen after the economy has already improved. Unsold goods and a decline in new home purchases are both leading economic indicators because they show a current weakness in the economy that could lead to further problems. An increase in new car purchases could be either a leading or coincident indicator, depending on the specific circumstances.

Which of the Following Is a Lagging Economic Indicator