Which of the following economic indicators is considered a 'Lagging Indicator' that confirms a trend rather than predicting it?

Answer options:

New housing starts

Unemployment rate

Stock market indices

Consumer confidence index

How to approach this question

Think about the timing: Do businesses hire/fire before a recession starts (Leading) or after they realize sales are down (Lagging)?

Full Answer

B.Unemployment rate✓ Correct

Unemployment is a lagging indicator because employment decisions (hiring/layoffs) typically occur after economic trends (growth/decline) have already established themselves.

Common mistakes

Confusing stock market (forward-looking) with labor market (reactive).

Question 10 All questions Question 12

Practice the full CPA BAR Practice Exam

50 questions · hints · full answers · grading

More questions from this exam

Q01TechGlobal Inc. is evaluating the performance of its European division using Economic Value Added...Hard Q02A manufacturing company is analyzing its production process to identify bottlenecks. The process ...Medium Q03Management is using the COSO Enterprise Risk Management (ERM) framework to address a newly identi...Medium Q04RetailCo is evaluating two strategic initiatives using a Balanced Scorecard approach. <br/>Initia...Medium Q05A company is deciding between two mutually exclusive projects. <br/>Project X: NPV = $50,000, IRR...Medium

View all 50 questions →