Change in house interest rate is a?
A) Leading Indicator
B) Lagging Indicator
C) Coincident Indicator
D) Cyclical Indicator
Answers
Change in house interest rate is a?
A) Leading Indicator
Changes or fluctuations in interest rate in the housing market is an example of lagging indicator in Economics.Therefore,the correct answer is option B) or lagging indicator.
Explanation:
Lagging indicators often imply any aftermath or consequences of a major economic event or phenomenon.It represents certain changes in economic variables in the country as a result of any prior economic adjustments of modifications.In this instance,a change in interest rate in the housing market can be evidently caused by various factors such as changes in the overall demand for real estate or housing,variations in the supply of real estate projects or properties,changes in the rate at which Central Bank borrows or lends funds,fluctuations of the open market operation conducted by Central Bank and so forth.Hence,interest rate change in housing market represents the impact of any other major economic changes in housing market specifically or in the economy as a whole,thereby,qualifying it as lagging variable.