An economic variable that changes before real output changes, used to anticipate the direction of the economy, is a:

1. The chapter defines a leading indicator as a factor that changes before the economy follows a trend. 2. In other words, variables that change before real output changes are leading indicators. 3. So the correct choice is the leading indicator. 4. Lagging indicators change after, and coincident/concurrent indicators change simultaneously. _Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 5 "Business Cycles", p.4_