Question

Key economic variables that economists use to predict a new phase of a business cycle:

cycle points
standards and checks
leading indicators
production flows
progress tickers

Answer 1

Economists use economic indicators like leading, coincident, and lagging indicators to forecast business cycle phases, which include expansion, peak, contraction, and trough. Accurate measurement and prediction of these indicators are vital for economic policy to mitigate downturns.

Step-by-step explanation:

Economists utilize key economic indicators to predict the future phases of the business cycle. These indicators include leading indicators, such as new orders for consumer durables, which forecast the direction of the economy; coincident indicators, like the gross domestic product (GDP), that detail current economic activity; and lagging indicators, for instance, interest rates, which are visible only after the economic activity has occurred.

The business cycle represents the economy's short-term movement in and out of recession and includes four distinct phases: expansion, peak, contraction, and trough. Understanding these phases is critical for economic policy, as it aims to minimize the negative effects of the cycle by mitigating the severity and duration of economic downturns. Accurate measurement of economic activities, such as GDP, and the ability to predict future economic conditions using economic indicators are essential for effective policy-making.