Why do economists study the data of economic indicators?

• A. To determine the exact value of money in circulation
• B. To calculate the total population of a country
• C. To analyze and predict trends in the economy
• D. To set government tax rates directly

Answer: (C)

Verified step by step guidance

1. Understand that economic indicators are statistical data points that provide information about the overall health and direction of an economy.
2. Recognize that economists study these indicators to analyze patterns and trends, such as growth rates, inflation, unemployment, and consumer spending.
3. Know that by examining these trends, economists can make informed predictions about future economic conditions, which helps in decision-making for businesses, governments, and investors.
4. Note that economic indicators are not used to determine the exact value of money in circulation or to calculate population directly, nor do economists set tax rates based solely on these indicators.
5. Conclude that the primary purpose of studying economic indicators is to analyze and predict trends in the economy, enabling better understanding and planning.