Indicators measure economic condition and forecast turning points. Leading indicators: Precede turning points (predict future activity). Examples: Stock market indices, Business confidence, New orders, Permits issued, Consumer expectations. Coincident indicators: Move with economy (measure current state). Examples: GDP, Employment, Industrial production, Retail sales, Personal income. Lagging indicators: Confirm turning points (follow actual changes). Examples: Unemployment rate, Interest rates, Inflation, Debt levels, Unit labor costs. Index of leading/coincident/lagging indicators: Composite indices combining multiple indicators; RBI and CSO track in India. Uses: Forecasting (leading indicators predict recessions/expansions), Policy-making (timely response), Investment decisions. Limitations: Leading indicators sometimes give false signals; lag times vary; composite indices may obscure important details. Volatility: Some indicators volatile (stock prices), others smooth (employment). Real example: Stock market crash often leads recession by months. Indian context: RBI monitors Index of Industrial Production (IIP), Purchasing Managers' Index (PMI), Consumer confidence. ICAI focus: Types of indicators, forecasting uses, interpretation. Exam tip: "Leading indicates future; coincident indicates present; lagging confirms past"—memory device for classification.