What are the various indicators are used to find out how the economy shall perform in the future?

CA Final · Advanced Financial Management · MTP · September 2025
What are the various indicators are used to find out how the economy shall perform in the future?

Suggested Answer and Working Notes:

Various indicators are used to find out how the economy shall perform in the future. The indicators have been classified as under: (i) Leading Indicators: They lead the economic activity in terms of their outcome. They relate to the time series data of the variables that reach high/low points in advance of economic activity. (ii) Roughly Coincidental Indicators: They reach their peaks and troughs at approximately the same in the economy. (iii) Lagging Indicators: They are time series data of variables that lag behind in their consequences vis-a- vis the economy. They reach their turning points after the economy has reached its own already.

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