Problem
The stock market has been called a "leading indicator" of future economic activity, while the unemployment rate has been called a "lagging indicator" of past economic activity. Combine the data from questions 3 and 4, including data on the stock market and the unemployment rate to answer the following two questions:
(a) How well do movements in a stock price index (such as the DJIA or the S&P 500) predict ahead of time the beginning or end of each recession?
(b) How well do beginnings or endings of recessions predict future changes, up or down, in the unemployment rate?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.