Final answer:
Economic indicators are used to forecast the state of the economy by providing information on its future direction, current activity, and past performance.
Step-by-step explanation:
Economic indicators are used to forecast the state of the economy. These indicators help us evaluate the economy by providing information on its future direction, current activity, and past performance. There are three main types of economic indicators: leading indicators, coincident indicators, and lagging indicators. Leading indicators, such as new orders for consumer durables, attempt to predict the future direction of the economy. Coincident indicators, such as gross domestic product (GDP), describe the current economic activity. Lagging indicators, such as interest rates, become apparent only after the activity has occurred.