Question: You are employed by the state bureau of economic development. There is a demand for a leading economic index to review past economic activity and to forecast future economic trends in the state. You decide that several key factors should be included in the index: number of new businesses starting during the year, number of businesses failures, state income tax receipts, college enrollment, and the state sales tax receipts. Here are the data for 2000 and 2003.

A. Decide on the weights to be applied to each item in the leading index

B. Compute the leading economic indicator for 2003

C. Interpret the indexes