If a Macroeconomic Variable Tends to Aid in Predicting the Future

question 23

Multiple Choice

If a macroeconomic variable tends to aid in predicting the future path of real GDP, it is said to be a

• A)leading variable.
• B)coincident variable.
• C)convenient variable.
• D)correlated variable.
• E)lagging variable.

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Definitions:

Normal Profits

The minimum level of profit necessary for a company to remain competitive in the market, also seen as the cost of keeping an entrepreneur in business.

Economic Profits

Profits calculated by subtracting both the explicit and implicit costs from a firm's total revenues; a measure of earnings exceeding the opportunity costs.

Entry Of Firms

The process by which new companies enter into an industry, adding to the competition.

Government Subsidies

Financial support provided by the government to organizations, businesses, or individuals, aimed at promoting certain activities or reducing costs.