The table below contains recent data Y is quarterly real GDP in millions of (cha

Question

The table below contains recent data Y is quarterly real GDP in millions of (chained) 2007 dollars expressed as a seasonally adjusted annual rate, E is employment, and U is unemployment in millions of persons each expressed as quarterly averages. When answering the questions about this data, show an example of each calculation and express percentages to one decimal place. Calculate the annual percentage growth rate in real GDP between each quarter. Calculate the unemployment rate for each quarter. - There have been fears that the recent decline in the data you calculated in part and that would support these concerns?

Explanation / Answer

A )ANNUAL GROWTH RATE OF GDP BETWEEN QUARTERS

GROWTH RATE BETWEEN Q1-2014 TO Q2-2014 = (1743377-1727757)*100/ 1727757

FOR ANNUAL GROWTH RATE ABOVE WILL BE MULTIPLIED BY 4

THEREFORE ANNUAL GROWTH RATE OF GDP = 4*(1743377-1727757)*100/ 1727757 =3.62%

B) UNEMPLOYMENT RATE FOR Q1-2014= U/(E+U)= 1340/(1340+17764) =7.01

C) IN 2015, GDP growth rate is declining and negative and unemployment rate is increasing, this is evidence of recession which may be due to decline in prices

Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Y 1727757 1743377 1752569 1767132 1764036 1762917 1773166 NA E 17764 17763 17794 17864 17896 17932 17966 18006 U 1340 1335 1337 1274 1294 1307 1339 1368 ANNUAL GROWTH RATE IN Y 3.62 2.11 3.32 -0.70 -0.25 2.33 UNEMPLOYMENT RATE 7.01 6.99 6.99 6.66 6.74 6.79 6.94 7.06

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