Forecasting the Future Path of Real GDP by Exploiting Past

question 41

Multiple Choice

Forecasting the future path of real GDP by exploiting past statistical relationships

• A) is never very reliable.
• B) can be accomplished by the construction and use of an index of leading variables.
• C) can be accomplished by the construction and use of an index of lagging variables.
• D) can be accomplished by the construction and use of an index of coincident variables.
• E) can only be accomplished if there is a perfectly positive correlation.

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Definitions:

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Profitability

Refers to a company's ability to generate income relative to its revenue, operating costs, and other expenses over a certain period.

Solvency

The ability of a business to meet its long-term debts and financial obligations.

Liquidity Ratio

A financial metric used to determine a company's ability to pay off its short-term liabilities with its available liquid assets.