Question

Place each item below in the appropriate category.

Note: Although more than one item may be misplaced, you will receive feedback on one misplaced item at a time

Answer 1

Leading economic indicators:

- Manufacturers' orders for durable goods

- Stock prices

Not leading economic indicators:

- Average duration of unemployment

- The trade deficit

- Housing starts

- Interest rates spread

- The unemployment rate

- Building permits

Step-by-step explanation:

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Answer 2

Leading economic indicators includes:

• Housing starts
• Manufacturers’ orders for durable goods
• Interest rates spread
• Stock prices
• Building permits

Not leading economic indicators includes:

• Average duration of unemployment
• The trade deficit
• The unemployment rate

Leading economic indicators are typically those which change before the economy as a whole begins to move in a particular direction and are used to predict future economic activity. Non-leading indicators, on the other hand, might change at the same time as the economy or after it.

Based on economic theory, here's how these items are generally categorized:

Leading economic indicators includes:

• Housing starts
• Manufacturers’ orders for durable goods
• Interest rates spread
• Stock prices
• Building permits

These indicators can provide advanced signals of the direction of future economic activity.

Not leading economic indicators includes:

• Average duration of unemployment
• The trade deficit
• The unemployment rate

These tend to reflect current or past economic situations rather than predict future performance.