Which of the following is not an example of coincident indicator?
Options
AIndustrial production
BInflation
CRetail sales
DNew orders for plants and equipment
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Business CyclesPYQ - Dec 2020Question 86 of 20
All Questions Correct Answer
✅ Option d — New orders for plants and equipment
All Options:
- AIndustrial production
- BInflation
- CRetail sales
- DNew orders for plants and equipment
Detailed Solution & Explanation
To determine which option is not an example of a coincident indicator, we need to understand what a coincident indicator is.
• A coincident indicator is a type of economic indicator that moves in tandem with the overall economy, typically rising when the economy is growing and falling when the economy is in a recession.
• Examples of coincident indicators include industrial production, inflation, and retail sales, as they all reflect the current state of the economy.
• New orders for plants and equipment, on the other hand, is considered a leading indicator, as it tends to rise before an economic upturn and fall before an economic downturn.
The correct answer is not an example of a coincident indicator because it does not move in tandem with the overall economy, but rather precedes changes in the economy.
• Industrial production and retail sales are incorrect options because they are indeed coincident indicators, as they reflect the current state of the economy.
• The concept of coincident indicators is important in business economics, as it helps economists and policymakers understand the current state of the economy and make informed decisions.
About This Chapter: Business Cycles
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Phases, Features, Causes
Business Cycles describe the recurring fluctuations in economic activity — Expansion, Peak, Recession, and Trough. This chapter covers the phases, features, and causes of business cycles, along with theories explaining why economies go through regular boom-bust patterns.
View Official ICAI SyllabusExam Strategy Tip
This is a lower-weightage chapter but easy to score. Focus on memorizing the four phases and their characteristics. Questions are usually straightforward.
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