Which best describes an economic indicator?

An economic indicator is best described as a statistic that informs about economic performance. Economic indicators provide valuable data that reflect the current state of the economy and help gauge its trajectory. They cover various aspects such as employment rates, inflation, GDP growth, and trade balances. By analyzing these statistics, economists and policymakers can make informed decisions regarding fiscal and monetary policies, as well as anticipate future economic trends.

While options like a tool for setting interest rates or government spending policies relate indirectly to economic indicators, they do not capture the essential purpose of what an economic indicator is. Similarly, while consumer confidence is an important metric that can be considered an economic indicator, it represents just one aspect of a broader range of statistics that provide a comprehensive picture of overall economic performance. Therefore, the correct choice aptly encompasses the general role and significance of economic indicators in assessing the health of an economy.