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The Lagging Indicator isa.Gross Domestic Productb.Sensexc.Unemploymentd.interest rates

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Solution

Understanding Lagging Indicators

Lagging indicators are metrics that reflect the performance of an economy after a trend or change has occurred. They are often used to confirm patterns or signals in economic data.

  1. Gross Domestic Product (GDP) - This measures the total economic output and reflects a country's economic health. It usually shows changes after the economy has already started to improve or decline, hence a lagging indicator.

  2. Sensex - This is a stock market index that represents the performance of large companies listed on the Bombay Stock Exchange. It’s more of a leading indicator as it reacts to investor sentiment and expectations.

  3. Unemployment Rate - This is a measure of the number of people who are unemployed but actively seeking employment. It often changes after economic shifts, making it a lagging indicator as well.

  4. Interest Rates - These are influenced by central banks' policies and can be both leading and lagging indicators, but they are often used as a predictive measure rather than a reflection of past economic performance.

Final Answer

The correct answer is c. Unemployment, as it is a classic example of a lagging indicator, reflecting economic performance post changes in economic trends.

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