One important reason economists track business investment is that:
A) it helps them decide which stocks to purchase.
B) it is a leading indicator of the business cycle.
C) business investment is an excellent proxy for government investment.
D) it shows them where the economy has been.

Question

Quizplus · Accepted Answer

Business investment is often seen as a leading indicator of the business cycle. When businesses are investing in new equipment, building new facilities, and expanding their operations, it tends to indicate confidence in the economy and a belief that demand will continue to grow. This, in turn, can lead to job growth and increases in consumer spending, which are important drivers of economic growth. Therefore, economists closely watch business investment as a signal of where the economy is headed.

One Important Reason Economists Track Business Investment Is That