Which economic indicator provides information about the future expected profits of businesses?

• A. Consumer price index
• B. Business confidence index
• C. Unemployment rate
• D. Gross domestic product growth rate

Answer: (B)

Verified step by step guidance

1. Understand that the question asks for an economic indicator that reflects the future expected profits of businesses, which means it should provide forward-looking information about business sentiment or expectations.
2. Review the given options: Consumer Price Index (CPI), Business Confidence Index, Unemployment Rate, and Gross Domestic Product (GDP) Growth Rate, and consider what each measures.
3. Recall that the Consumer Price Index measures changes in the price level of a basket of consumer goods and services, which relates to inflation but not directly to business profit expectations.
4. Recognize that the Unemployment Rate measures the percentage of the labor force that is unemployed, indicating current labor market conditions but not future business profits.
5. Identify that the Business Confidence Index reflects the optimism or pessimism of business managers about future economic conditions, including expected profits, making it the indicator that provides information about future expected profits of businesses.