Forecasting the Future Path of Real GDP by Exploiting Past

question 24

Multiple Choice

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

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

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Definitions:

Productive Efficiency

A situation where goods and services are produced at the lowest possible cost and resources are utilized optimally.

Cost Minimization

A strategy employed by businesses to reduce production or operational costs to the lowest possible level without sacrificing quality or output.

Marginal Cost

The cost implicated in generating an added unit of a product or service.

Efficient Allocation

The distribution of resources in a way that maximizes the net benefit received by an economy.