Why do economists study the data of economic indicators?

Question: Why do economists study the data of economic indicators?

Economists study the data of economic indicators because these indicators provide crucial insights into the health and direction of an economy. Economic indicators, such as the Gross Domestic Product (GDP), Consumer Price Index (CPI), and unemployment rates, are vital tools for analyzing the current state of an economy and predicting future trends. They help economists understand the ebb and flow of economic activities, assess the impact of fiscal and monetary policies, and make informed decisions. For instance, leading indicators can signal upcoming changes in the economy, which is particularly useful for short-term forecasting. On the other hand, lagging indicators can confirm long-term trends. By studying these indicators, economists can advise businesses and policymakers on how to respond to changing economic conditions.

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