The method of forecasting with leading indicators can be criticized for
A) occasionally forecasting a recession when none ensues.
B) forecasting the direction of the economy but not the size of the change in economic activity.
C) frequent revisions of data after original publication.
D) All of the above
D
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You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A) a reduction in sales taxes B) a reduction in taxes on luxury yachts C) an investment tax credit D) all of the above
Currently an economy is producing (at a point on its production possibilities frontier) 100 units of good X and the opportunity cost of producing 1X is 3Y. If good X is produced at increasing opportunity costs, then when the economy produces 120 units of good X (on the same PPF) the opportunity cost of producing 1Y (not 1X) could be
A) 1/4X. B) 1/3X. C) 1/2X. D) 1X. E) none of the above
Refer to the graph shown. If market price decreases from $7.00 per unit to $6.00 per unit, a profit-maximizing perfectly competitive firm will:
A. decrease output from 850 to 750. B. produce 850 units of output. C. increase output from 650 to 750. D. continue to produce 850 units.
The table below shows the cyclically adjusted budget surplus as a percentage of GDP over a five-year period.YearSurplus(+)11.0%20.930.540.251.5Refer to the above information. In which year was fiscal policy contractionary?
A. Year 5 B. Year 4 C. Year 3 D. Year 2