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Chapter 12: Problem 4

What is a coincident indicator?

Short Answer

Expert verified
A coincident indicator is an economic indicator that fluctuates concurrently with the overall state of the economy. It reflects the current state of the economy, with some examples being the unemployment rate, corporate profits, and personal income.

Step by step solution

01

Understanding the Term

A coincident indicator is a type of economic indicator that provides an analysis of current (or concurrent) economic conditions. It does not predict future trends but rather changes at the same time as the overall economy or stock market. They are used by economists and businesses to assess the current state of the economy.
02

Significance of coincident indicators

Coincident indicators are important in economic analysis because they provide evidence of the state of the economy in real-time, helping economists to confirm whether a predicted economic trend is currently happening.
03

Examples of coincident indicators

Examples of coincident indicators include the unemployment rate, corporate profits, and personal income. An important point to note is that while these indicators give a snapshot of an economy's current state, they do not indicate where it might be headed.

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