Which of the following indicators does not forecast but merely confirms a long-term trend?​

Correct option is C

The correct answer is (c) Coincident indicator

Explanation:

• A coincident indicator is a metric that changes simultaneously with the general economic conditions or the business cycle.

• These indicators do not have predictive power; instead, they confirm the current state of the economy and validate long-term trends already in progress.

• They are essential for identifying the peaks and troughs of the business cycle as they occur.

• Examples include Gross Domestic Product (GDP), industrial production, and personal income levels.

• Because they move in tandem with the economy, they provide a "real-time" snapshot rather than a forecast of future shifts.

Information Booster:

• Indicators are generally classified into three types based on their timing relative to the business cycle: Leading, Coincident, and Lagging.

• The Composite Index of Coincident Economic Indicators is often used by policymakers to monitor the current health of a nation's economy.

Additional Knowledge:

 Revised estimate indicator

• This refers to the updated data released by statistical agencies after initial preliminary figures are published.

• It is a correction of previous data rather than a specific class of economic cycle indicators.

• While it helps in accuracy, it is not a categorized tool for forecasting or trend confirmation in the same way coincident indicators are.

• Unlike coincident indicators, these change before the economy as a whole changes.

• They are used to forecast or predict future trends and turning points in the business cycle.

• Common examples include stock market returns, index of consumer expectations, and new building permits.