Which of the following statements about the index of leading economic indicators is the most accurate?
A)It provides accurate information on the duration of downturns in the economy.
B)It provides accurate information on the depth of downturns in the economy.
C)It can result in a self-fulfilling prophecy if business firms respond to leading economic indicator predictions.
D)It virtually always predicts downturns in the economy with a lead-time of six months.

Question

Quizplus · Accepted Answer

The index of leading economic indicators is not always accurate in predicting downturns in the economy. However, if business firms respond to these predictions and make changes in their behavior, it can actually cause a self-fulfilling prophecy and affect the actual state of the economy. Therefore, statement C is the most accurate.

Which of the Following Statements About the Index of Leading