Use the data in the Table to answer the questions asked in 4a and 4b on each of
ID: 1094605 • Letter: U
Question
Use the data in the Table to answer the questions asked in 4a and 4b on each of the 3 variables for the US economy:
a. Calculate the changes in inflation rates, unemployment rates and the RGDP growth rates for the years from Year 2007 through 2013 and show them in a new column next to each of the values of the three variables (a template of the table is given below).
Year
Real GDP
RGDP growth rate in %
Unemployment Rate
Change in U rate in %
CPI Indices
Inflation rate in %
2006
14,613.8
-
4.6%
-
201.6
-
2007
14,873.7
?
4.6%
?
207.3
?
2008
14,830.4
?
5.8%
?
215.3
?
2009
14,418.7
?
9.3%
?
214.53
?
2010
14,783.8
?
9.6%
?
218.05
?
2011
15,020.6
?
8.9%
?
224.93
?
2012
15,369.2
?
8.1%
?
229.59
?
2013
15,710.3
?
7.3%
?
232.95
?
b. Based on those calculations, briefly describe the overall economic performance over the last 7 years (2006-2013) and critically predict about these three macroeconomic variables for 2014-15.
Hint: While predicting the trend for 2014-15 (based on the growth rates and trend you estimated in the table above), it is imperative to observe the most recent data on these three variables.
Year
Real GDP
RGDP growth rate in %
Unemployment Rate
Change in U rate in %
CPI Indices
Inflation rate in %
2006
14,613.8
-
4.6%
-
201.6
-
2007
14,873.7
?
4.6%
?
207.3
?
2008
14,830.4
?
5.8%
?
215.3
?
2009
14,418.7
?
9.3%
?
214.53
?
2010
14,783.8
?
9.6%
?
218.05
?
2011
15,020.6
?
8.9%
?
224.93
?
2012
15,369.2
?
8.1%
?
229.59
?
2013
15,710.3
?
7.3%
?
232.95
?
Explanation / Answer
a. Calculate the changes in inflation rates, unemployment rates and the RGDP growth rates for the years from Year 2007 through 2013 and show them in a new column next to each of the values of the three variables
Below is the completed table. % change for each category is calculate using [(current year value - Last year value) / Last year value ] x 100
b. Based on those calculations, briefly describe the overall economic performance over the last 7 years (2006-2013) and critically predict about these three macroeconomic variables for 2014-15.
Over the last 7 years
GDP - Overall, there has been mostly growth except for a couple of years of decline. When growth did it occur, it has been slow and in the 1 - 3 percent raise. For a good economy, we would like to see 4% or higher.
Unemployment - We went through a 2 - 3 year period where unemployment rapidly rised (2007 - 2009). Since this time, employment opportunities have been slowly getting better. As a result, the unemployment rate has consistently decreased. Not as fast as we would like but it has been a consist decrease in the percentage of unemployed.
Inflation - Has remained around 3% or lower in the last 7 years which is a good manageable rate. We do not want to see any inflation of 4% or higher if possible.
Next 3 years
GDP - The trend in recent years is for GDP to range between 2 - 3%.on average. There is not a distinct trend in the last 3 years that shows it going up or down. As a result, slow and stable GDP growth is expected in the next 3 years.
Unemployment - In the most recent years, unemployment has been trending distinctly downward. It appears that this trend will continue and unemployment will continue to decline in the next 3 years but at a slower percentage rate.
Inflation - Over the last 3 years, inflation has been trending downward. It cannot go down much further than it already has but will likely stay lone and continue to decline slightly on a percentage basis.
Year Real GDP RGDP growth rate in % Unemployment Rate Change in U rate in % CPI Indices Inflation rate in % 2006 14,613.80 - 4.60% - 201.6 - 2007 14,873.70 1.78% 4.60% 0.00% 207.3 2.83% 2008 14,830.40 -0.29% 5.80% 26.09% 215.3 3.86% 2009 14,418.70 -2.78% 9.30% 60.34% 214.53 -0.36% 2010 14,783.80 2.53% 9.60% 3.23% 218.05 1.64% 2011 15,020.60 1.60% 8.90% -7.29% 224.93 3.16% 2012 15,369.20 2.32% 8.10% -8.99% 229.59 2.07% 2013 15,710.30 2.22% 7.30% -9.88% 232.95 1.46%Related Questions
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