SIE practice questionmediumCoincident Indicators
Which of the following is a COINCIDENT economic indicator that reflects the current state of the economy?
- AIndustrial production✓ Correct answer
- BStock market performance (S&P 500)
- CNew orders for consumer goods
- DAverage prime rate charged by banks
Explanation
Why A — Industrial production
Industrial production is a coincident indicator — it moves in real-time with the economy. Other coincident indicators include nonfarm payroll employment, personal income (less transfer payments), and manufacturing/trade sales. Stock market performance and new orders for consumer goods are leading indicators (they predict future changes). The average prime rate is a lagging indicator (it changes after the economy has already shifted).
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