1. Use data from FRED to construct, for your own country or a country of your choosing, charts for the growth rate of real GDP, consumption (which will be listed as “real personal consumption expenditures”), investment (“real gross private domestic investment”), public expenditure (“Real Government Consumption Expenditures and Gross Investment”), and net exports (“Real Net Exports of Goods and Services”). To get the growth rate, click on Edit Graph and make sure the Units are set to “Percent Change From Year Ago” for each variable. You can print out separate graphs for each variable, or include them all on the same graph.
Print out the charts that you have constructed.
2. How has government expenditure evolved in your own country throughout the period for which data is available?
3. Comment on the relationship between the growth rate of output and government spending during this period. 4. Describe the volatility of government spending and net exports relative to that of GDP and suggest an explanation for the patterns you observe.
5. Describe any other patterns you observe.
6. Now construct a single chart which has real GDP growth, the unemployment rate, and the inflation rate for the US. Select the period from 1960 until the most recent year available. For the inflation rate, you’ll want to use the Consumer Price Index For All Urban Consumers: All Items, and be sure to adjust the units from Index to Percent Change From Year Ago. Print out the chart that you have constructed.
7. What do you notice about the evolution of unemployment and inflation in the early 1980s?
8. Write a brief report on the evolution of inflation, unemployment, and the real GDP growth rate over the post-1960 period.