The Conference Board publishes data on Business Cycle Indicators (BCI). The Composite Index of Leading Economic Indicators is one of the three components of the BCI. Changes in leading economic indicators usually precede changes in GDP. Some of the variables tracked by the index are listed below.
i. The average weekly hours worked by manufacturing workers
ii. The average number of initial applications for unemployment insurance
iii. The number of new orders for capital goods unrelated to defense
iv. The number of new building permits for residential buildings
v. The S&P 500 stock index
vi. Consumer sentiment
Examine each variable and explain whether it is likely to be positively correlated, negatively correlated, or uncorrelated with real GDP.
The average weekly hours worked by manufacturing workers is likely to be _____ with real GDP.
The average number of initial applications for unemployment insurance is likely to be _____ with real GDP.
The amount of new orders for capital goods unrelated to defense is likely to be _____ with real GDP.
The amount of new building permits for residential buildings is likely to be _____ with real GDP.
The S&P 500 stock index is likely to be _____ with real GDP.
Consumer sentiment is likely to be _____ with real GDP.

Answer rating: 100% (QA)

The average weekly hours worked by manufacturing workers is likely to be positively correlated with real GDP The average number of initial application... View the full answer