Question
As the name suggests, a lagging indicator is an economic variable whose movements occur after movements in the overall economy. a. A number of employment
As the name suggests, a lagging indicator is an economic variable whose movements occur after movements in the overall economy. a. A number of employment measures are lagging indicators. Consider the following variables: (1) increased use of temporary workers, (2) increases in new hires, (3) a decline in the number of workers laid off, and (4) an increase in overtime hours. In an economic recovery from a recession, which of these variables would have the shortest and longest lags? b. Top management of a company that produces luxury yachts has been waiting anxiously for the end of the recession and a resurgence in orders. Why might the company pay more attention to lagging indicators than to leading indicators? Explain.
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