Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 2, Problem 6WWMD
b)
To determine
The graphical representation of quarterly growth rates of real
b)
Expert Solution
Explanation of Solution
The data of quarterly growth rates of real GDP from 1960 to last year using the percent change from a year ago is as follows:
| Date | GDP, percentage change from quarter one year ago. |
| 1960-01-01 | 4.9 |
| 1960-04-01 | 2.1 |
| 1960-07-01 | 2.5 |
| 1960-10-01 | 0.9 |
| 1961-01-01 | -0.7 |
| 1961-04-01 | 1.6 |
| 1961-07-01 | 3.0 |
| 1961-10-01 | 6.4 |
| 1962-01-01 | 7.6 |
| 1962-04-01 | 6.7 |
| 1962-07-01 | 6.0 |
| 1962-10-01 | 4.3 |
| 1963-01-01 | 3.6 |
| 1963-04-01 | 3.8 |
| 1963-07-01 | 4.8 |
| 1963-10-01 | 5.2 |
| 1964-01-01 | 6.2 |
| 1964-04-01 | 6.2 |
| 1964-07-01 | 5.5 |
| 1964-10-01 | 5.2 |
| 1965-01-01 | 5.5 |
| 1965-04-01 | 5.7 |
| 1965-07-01 | 6.3 |
| 1965-10-01 | 8.5 |
| 1966-01-01 | 8.5 |
| 1966-04-01 | 7.5 |
| 1966-07-01 | 6.0 |
| 1966-10-01 | 4.5 |
| 1967-01-01 | 2.9 |
| 1967-04-01 | 2.6 |
| 1967-07-01 | 2.7 |
| 1967-10-01 | 2.7 |
| 1968-01-01 | 3.8 |
| 1968-04-01 | 5.5 |
| 1968-07-01 | 5.3 |
| 1968-10-01 | 5.0 |
| 1969-01-01 | 4.5 |
| 1969-04-01 | 3.1 |
| 1969-07-01 | 3.0 |
| 1969-10-01 | 2.0 |
| 1970-01-01 | 0.3 |
| 1970-04-01 | 0.2 |
| 1970-07-01 | 0.4 |
| 1970-10-01 | -0.2 |
| 1971-01-01 | 2.7 |
| 1971-04-01 | 3.1 |
| 1971-07-01 | 3.0 |
| 1971-10-01 | 4.4 |
| 1972-01-01 | 3.5 |
| 1972-04-01 | 5.3 |
| 1972-07-01 | 5.4 |
| 1972-10-01 | 6.9 |
| 1973-01-01 | 7.6 |
| 1973-04-01 | 6.3 |
| 1973-07-01 | 4.8 |
| 1973-10-01 | 4.0 |
| 1974-01-01 | 0.6 |
| 1974-04-01 | -0.2 |
| 1974-07-01 | -0.6 |
| 1974-10-01 | -1.9 |
| 1975-01-01 | -2.3 |
| 1975-04-01 | -1.8 |
| 1975-07-01 | 0.8 |
| 1975-10-01 | 2.6 |
| 1976-01-01 | 6.2 |
| 1976-04-01 | 6.2 |
| 1976-07-01 | 5.0 |
| 1976-10-01 | 4.3 |
| 1977-01-01 | 3.2 |
| 1977-04-01 | 4.5 |
| 1977-07-01 | 5.8 |
| 1977-10-01 | 5.0 |
| 1978-01-01 | 4.1 |
| 1978-04-01 | 6.1 |
| 1978-07-01 | 5.2 |
| 1978-10-01 | 6.7 |
| 1979-01-01 | 6.5 |
| 1979-04-01 | 2.7 |
| 1979-07-01 | 2.4 |
| 1979-10-01 | 1.3 |
| 1980-01-01 | 1.4 |
| 1980-04-01 | -0.8 |
| 1980-07-01 | -1.6 |
| 1980-10-01 | 0.0 |
| 1981-01-01 | 1.6 |
| 1981-04-01 | 3.0 |
| 1981-07-01 | 4.3 |
| 1981-10-01 | 1.3 |
| 1982-01-01 | -2.2 |
| 1982-04-01 | -1.0 |
| 1982-07-01 | -2.6 |
| 1982-10-01 | -1.4 |
| 1983-01-01 | 1.4 |
| 1983-04-01 | 3.3 |
| 1983-07-01 | 5.7 |
| 1983-10-01 | 7.9 |
| 1984-01-01 | 8.6 |
| 1984-04-01 | 8.0 |
| 1984-07-01 | 6.9 |
| 1984-10-01 | 5.6 |
| 1985-01-01 | 4.6 |
| 1985-04-01 | 3.7 |
| 1985-07-01 | 4.3 |
| 1985-10-01 | 4.2 |
| 1986-01-01 | 4.1 |
| 1986-04-01 | 3.7 |
| 1986-07-01 | 3.1 |
| 1986-10-01 | 2.9 |
| 1987-01-01 | 2.7 |
| 1987-04-01 | 3.4 |
| 1987-07-01 | 3.3 |
| 1987-10-01 | 4.5 |
| 1988-01-01 | 4.2 |
| 1988-04-01 | 4.5 |
| 1988-07-01 | 4.2 |
| 1988-10-01 | 3.8 |
| 1989-01-01 | 4.3 |
| 1989-04-01 | 3.7 |
| 1989-07-01 | 3.9 |
| 1989-10-01 | 2.7 |
| 1990-01-01 | 2.8 |
| 1990-04-01 | 2.4 |
| 1990-07-01 | 1.7 |
| 1990-10-01 | 0.6 |
| 1991-01-01 | -1.0 |
| 1991-04-01 | -0.5 |
| 1991-07-01 | -0.1 |
| 1991-10-01 | 1.2 |
| 1992-01-01 | 2.9 |
| 1992-04-01 | 3.2 |
| 1992-07-01 | 3.7 |
| 1992-10-01 | 4.4 |
| 1993-01-01 | 3.3 |
| 1993-04-01 | 2.8 |
| 1993-07-01 | 2.3 |
| 1993-10-01 | 2.6 |
| 1994-01-01 | 3.4 |
| 1994-04-01 | 4.2 |
| 1994-07-01 | 4.3 |
| 1994-10-01 | 4.1 |
| 1995-01-01 | 3.5 |
| 1995-04-01 | 2.4 |
| 1995-07-01 | 2.7 |
| 1995-10-01 | 2.2 |
| 1996-01-01 | 2.6 |
| 1996-04-01 | 4.0 |
| 1996-07-01 | 4.1 |
| 1996-10-01 | 4.4 |
| 1997-01-01 | 4.3 |
| 1997-04-01 | 4.3 |
| 1997-07-01 | 4.7 |
| 1997-10-01 | 4.5 |
| 1998-01-01 | 4.9 |
| 1998-04-01 | 4.1 |
| 1998-07-01 | 4.1 |
| 1998-10-01 | 4.9 |
| 1999-01-01 | 4.8 |
| 1999-04-01 | 4.7 |
| 1999-07-01 | 4.7 |
| 1999-10-01 | 4.8 |
| 2000-01-01 | 4.2 |
| 2000-04-01 | 5.3 |
| 2000-07-01 | 4.1 |
| 2000-10-01 | 3.0 |
| 2001-01-01 | 2.3 |
| 2001-04-01 | 1.1 |
| 2001-07-01 | 0.5 |
| 2001-10-01 | 0.2 |
| 2002-01-01 | 1.3 |
| 2002-04-01 | 1.3 |
| 2002-07-01 | 2.2 |
| 2002-10-01 | 2.1 |
| 2003-01-01 | 1.8 |
| 2003-04-01 | 2.0 |
| 2003-07-01 | 3.3 |
| 2003-10-01 | 4.3 |
| 2004-01-01 | 4.3 |
| 2004-04-01 | 4.2 |
| 2004-07-01 | 3.4 |
| 2004-10-01 | 3.3 |
| 2005-01-01 | 3.9 |
| 2005-04-01 | 3.6 |
| 2005-07-01 | 3.5 |
| 2005-10-01 | 3.1 |
| 2006-01-01 | 3.4 |
| 2006-04-01 | 3.1 |
| 2006-07-01 | 2.4 |
| 2006-10-01 | 2.6 |
| 2007-01-01 | 1.5 |
| 2007-04-01 | 1.8 |
| 2007-07-01 | 2.2 |
| 2007-10-01 | 2.0 |
| 2008-01-01 | 1.1 |
| 2008-04-01 | 1.1 |
| 2008-07-01 | 0.0 |
| 2008-10-01 | -2.8 |
| 2009-01-01 | -3.3 |
| 2009-04-01 | -3.9 |
| 2009-07-01 | -3.0 |
| 2009-10-01 | 0.2 |
| 2010-01-01 | 1.7 |
| 2010-04-01 | 2.8 |
| 2010-07-01 | 3.2 |
| 2010-10-01 | 2.6 |
| 2011-01-01 | 1.9 |
| 2011-04-01 | 1.7 |
| 2011-07-01 | 0.9 |
| 2011-10-01 | 1.6 |
| 2012-01-01 | 2.7 |
| 2012-04-01 | 2.4 |
| 2012-07-01 | 2.5 |
| 2012-10-01 | 1.5 |
| 2013-01-01 | 1.6 |
| 2013-04-01 | 1.3 |
| 2013-07-01 | 1.9 |
| 2013-10-01 | 2.6 |
| 2014-01-01 | 1.4 |
| 2014-04-01 | 2.7 |
| 2014-07-01 | 3.1 |
| 2014-10-01 | 2.9 |
| 2015-01-01 | 4.0 |
| 2015-04-01 | 3.3 |
| 2015-07-01 | 2.4 |
| 2015-10-01 | 1.9 |
| 2016-01-01 | 1.6 |
| 2016-04-01 | 1.3 |
| 2016-07-01 | 1.6 |
| 2016-10-01 | 2.0 |
| 2017-01-01 | 2.1 |
| 2017-04-01 | 2.2 |
| 2017-07-01 | 2.4 |
| 2017-10-01 | 2.8 |
| 2018-01-01 | 2.9 |
c)
To determine
The graphical representation of quarterly growth rates of real GDP from 1960 to last year using the percent change from preceding period quarterly. To ascertain the least volatile and most volatile measure, and the differences between these three series.
c)
Expert Solution
Explanation of Solution
The data of quarterly growth rates of real GDP from 1960 to last year using the percent change from preceding period quarterly is as follows:
| Date | GDP percent change from preceding period, quarterly |
| 1960-04-01 | -2.1 |
| 1960-07-01 | 2.0 |
| 1960-10-01 | -5.0 |
| 1961-01-01 | 2.7 |
| 1961-04-01 | 7.0 |
| 1961-07-01 | 7.9 |
| 1961-10-01 | 8.1 |
| 1962-01-01 | 7.3 |
| 1962-04-01 | 3.7 |
| 1962-07-01 | 5.0 |
| 1962-10-01 | 1.3 |
| 1963-01-01 | 4.4 |
| 1963-04-01 | 4.6 |
| 1963-07-01 | 9.1 |
| 1963-10-01 | 2.6 |
| 1964-01-01 | 8.7 |
| 1964-04-01 | 4.4 |
| 1964-07-01 | 6.4 |
| 1964-10-01 | 1.2 |
| 1965-01-01 | 10.0 |
| 1965-04-01 | 5.1 |
| 1965-07-01 | 9.2 |
| 1965-10-01 | 9.5 |
| 1966-01-01 | 10.1 |
| 1966-04-01 | 1.4 |
| 1966-07-01 | 3.4 |
| 1966-10-01 | 3.3 |
| 1967-01-01 | 3.6 |
| 1967-04-01 | 0.2 |
| 1967-07-01 | 3.8 |
| 1967-10-01 | 3.0 |
| 1968-01-01 | 8.4 |
| 1968-04-01 | 6.9 |
| 1968-07-01 | 3.1 |
| 1968-10-01 | 1.6 |
| 1969-01-01 | 6.4 |
| 1969-04-01 | 1.2 |
| 1969-07-01 | 2.7 |
| 1969-10-01 | -1.9 |
| 1970-01-01 | -0.6 |
| 1970-04-01 | 0.6 |
| 1970-07-01 | 3.7 |
| 1970-10-01 | -4.2 |
| 1971-01-01 | 11.3 |
| 1971-04-01 | 2.2 |
| 1971-07-01 | 3.3 |
| 1971-10-01 | 0.9 |
| 1972-01-01 | 7.6 |
| 1972-04-01 | 9.4 |
| 1972-07-01 | 3.8 |
| 1972-10-01 | 6.9 |
| 1973-01-01 | 10.3 |
| 1973-04-01 | 4.4 |
| 1973-07-01 | -2.1 |
| 1973-10-01 | 3.8 |
| 1974-01-01 | -3.4 |
| 1974-04-01 | 1.0 |
| 1974-07-01 | -3.7 |
| 1974-10-01 | -1.5 |
| 1975-01-01 | -4.8 |
| 1975-04-01 | 2.9 |
| 1975-07-01 | 7.0 |
| 1975-10-01 | 5.5 |
| 1976-01-01 | 9.3 |
| 1976-04-01 | 3.0 |
| 1976-07-01 | 2.2 |
| 1976-10-01 | 2.9 |
| 1977-01-01 | 4.8 |
| 1977-04-01 | 8.0 |
| 1977-07-01 | 7.4 |
| 1977-10-01 | 0.0 |
| 1978-01-01 | 1.3 |
| 1978-04-01 | 16.4 |
| 1978-07-01 | 4.1 |
| 1978-10-01 | 5.5 |
| 1979-01-01 | 0.7 |
| 1979-04-01 | 0.4 |
| 1979-07-01 | 3.0 |
| 1979-10-01 | 1.0 |
| 1980-01-01 | 1.3 |
| 1980-04-01 | -8.0 |
| 1980-07-01 | -0.5 |
| 1980-10-01 | 7.7 |
| 1981-01-01 | 8.1 |
| 1981-04-01 | -2.9 |
| 1981-07-01 | 4.9 |
| 1981-10-01 | -4.3 |
| 1982-01-01 | -6.1 |
| 1982-04-01 | 1.8 |
| 1982-07-01 | -1.5 |
| 1982-10-01 | 0.2 |
| 1983-01-01 | 5.4 |
| 1983-04-01 | 9.4 |
| 1983-07-01 | 8.2 |
| 1983-10-01 | 8.6 |
| 1984-01-01 | 8.1 |
| 1984-04-01 | 7.1 |
| 1984-07-01 | 3.9 |
| 1984-10-01 | 3.3 |
| 1985-01-01 | 3.9 |
| 1985-04-01 | 3.6 |
| 1985-07-01 | 6.2 |
| 1985-10-01 | 3.0 |
| 1986-01-01 | 3.8 |
| 1986-04-01 | 1.8 |
| 1986-07-01 | 3.9 |
| 1986-10-01 | 2.2 |
| 1987-01-01 | 3.0 |
| 1987-04-01 | 4.4 |
| 1987-07-01 | 3.5 |
| 1987-10-01 | 7.0 |
| 1988-01-01 | 2.1 |
| 1988-04-01 | 5.4 |
| 1988-07-01 | 2.4 |
| 1988-10-01 | 5.4 |
| 1989-01-01 | 4.1 |
| 1989-04-01 | 3.1 |
| 1989-07-01 | 3.0 |
| 1989-10-01 | 0.8 |
| 1990-01-01 | 4.4 |
| 1990-04-01 | 1.5 |
| 1990-07-01 | 0.3 |
| 1990-10-01 | -3.6 |
| 1991-01-01 | -1.9 |
| 1991-04-01 | 3.2 |
| 1991-07-01 | 2.0 |
| 1991-10-01 | 1.4 |
| 1992-01-01 | 4.9 |
| 1992-04-01 | 4.4 |
| 1992-07-01 | 4.0 |
| 1992-10-01 | 4.2 |
| 1993-01-01 | 0.7 |
| 1993-04-01 | 2.3 |
| 1993-07-01 | 1.9 |
| 1993-10-01 | 5.6 |
| 1994-01-01 | 3.9 |
| 1994-04-01 | 5.5 |
| 1994-07-01 | 2.4 |
| 1994-10-01 | 4.7 |
| 1995-01-01 | 1.4 |
| 1995-04-01 | 1.2 |
| 1995-07-01 | 3.5 |
| 1995-10-01 | 2.7 |
| 1996-01-01 | 3.0 |
| 1996-04-01 | 6.8 |
| 1996-07-01 | 3.6 |
| 1996-10-01 | 4.2 |
| 1997-01-01 | 2.6 |
| 1997-04-01 | 6.8 |
| 1997-07-01 | 5.1 |
| 1997-10-01 | 3.5 |
| 1998-01-01 | 4.1 |
| 1998-04-01 | 3.8 |
| 1998-07-01 | 5.1 |
| 1998-10-01 | 6.6 |
| 1999-01-01 | 3.8 |
| 1999-04-01 | 3.1 |
| 1999-07-01 | 5.3 |
| 1999-10-01 | 7.0 |
| 2000-01-01 | 1.5 |
| 2000-04-01 | 7.5 |
| 2000-07-01 | 0.5 |
| 2000-10-01 | 2.5 |
| 2001-01-01 | -1.1 |
| 2001-04-01 | 2.4 |
| 2001-07-01 | -1.7 |
| 2001-10-01 | 1.1 |
| 2002-01-01 | 3.5 |
| 2002-04-01 | 2.4 |
| 2002-07-01 | 1.8 |
| 2002-10-01 | 0.6 |
| 2003-01-01 | 2.2 |
| 2003-04-01 | 3.5 |
| 2003-07-01 | 7.0 |
| 2003-10-01 | 4.7 |
| 2004-01-01 | 2.2 |
| 2004-04-01 | 3.1 |
| 2004-07-01 | 3.8 |
| 2004-10-01 | 4.1 |
| 2005-01-01 | 4.5 |
| 2005-04-01 | 1.9 |
| 2005-07-01 | 3.6 |
| 2005-10-01 | 2.6 |
| 2006-01-01 | 5.4 |
| 2006-04-01 | 0.9 |
| 2006-07-01 | 0.6 |
| 2006-10-01 | 3.5 |
| 2007-01-01 | 0.9 |
| 2007-04-01 | 2.3 |
| 2007-07-01 | 2.2 |
| 2007-10-01 | 2.5 |
| 2008-01-01 | -2.3 |
| 2008-04-01 | 2.1 |
| 2008-07-01 | -2.1 |
| 2008-10-01 | -8.4 |
| 2009-01-01 | -4.4 |
| 2009-04-01 | -0.6 |
| 2009-07-01 | 1.5 |
| 2009-10-01 | 4.5 |
| 2010-01-01 | 1.5 |
| 2010-04-01 | 3.7 |
| 2010-07-01 | 3.0 |
| 2010-10-01 | 2.0 |
| 2011-01-01 | -1.0 |
| 2011-04-01 | 2.9 |
| 2011-07-01 | -0.1 |
| 2011-10-01 | 4.7 |
| 2012-01-01 | 3.2 |
| 2012-04-01 | 1.7 |
| 2012-07-01 | 0.5 |
| 2012-10-01 | 0.5 |
| 2013-01-01 | 3.6 |
| 2013-04-01 | 0.5 |
| 2013-07-01 | 3.2 |
| 2013-10-01 | 3.2 |
| 2014-01-01 | -1.1 |
| 2014-04-01 | 5.5 |
| 2014-07-01 | 5.0 |
| 2014-10-01 | 2.3 |
| 2015-01-01 | 3.2 |
| 2015-04-01 | 3.0 |
| 2015-07-01 | 1.3 |
| 2015-10-01 | 0.1 |
| 2016-01-01 | 2.0 |
| 2016-04-01 | 1.9 |
| 2016-07-01 | 2.2 |
| 2016-10-01 | 2.0 |
| 2017-01-01 | 2.3 |
| 2017-04-01 | 2.2 |
| 2017-07-01 | 3.2 |
| 2017-10-01 | 3.5 |
| 2018-01-01 | 2.5 |
| 2018-04-01 | 3.5 |
The graphical representation of the quarterly growth rates of real GDP from 1960 to 2018 using the percent change from the previous quarter is as follows:
The quarterly percent change at the annual rate indicates the percent change, if the quarterly rate goes on for four quarters. It is calculated by compounding of quarterly rate for four quarters.
For some unpredictable quarterly series, percentage changes at quarterly rates rather than at annual rates are preferred because the question of comparability is less relevant and because the annual rate of change is smaller.
When these three data and their respective graph compare to each other for some specific successive period of time, following result is determined:
- 2nd one that is, GDP growth rate using percentage change from quarter one year ago is most volatile and 3rd way that is, GDP growth rate by using percent change from preceding period quarterly is least volatile.
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- Sue is a sole proprietor of her own sewing business. Revenues are $150,000 per year and raw material (cloth, thread) costs are $130,000 per year. Sue pays herself a salary of $60,000 per year but gave up a job with a salary of $80,000 to run the business. ○ A. Her accounting profits are $0. Her economic profits are - $60,000. ○ B. Her accounting profits are $0. Her economic profits are - $40,000. ○ C. Her accounting profits are - $40,000. Her economic profits are - $60,000. ○ D. Her accounting profits are - $60,000. Her economic profits are -$40,000.arrow_forwardSelect a number that describes the type of firm organization indicated. Descriptions of Firm Organizations: 1. has one owner-manager who is personally responsible for all aspects of the business, including its debts 2. one type of partner takes part in managing the firm and is personally liable for the firm's actions and debts, and the other type of partner takes no part in the management of the firm and risks only the money that they have invested 3. owners are not personally responsible for anything that is done in the name of the firm 4. owned by the government but is usually under the direction of a more or less independent, state-appointed board 5. established with the explicit objective of providing goods or services but only in a manner that just covers its costs 6. has two or more joint owners, each of whom is personally responsible for all of the partnership's debts Type of Firm Organization a. limited partnership b. single proprietorship c. corporation Correct Numberarrow_forwardThe table below provides the total revenues and costs for a small landscaping company in a recent year. Total Revenues ($) 250,000 Total Costs ($) - wages and salaries 100,000 -risk-free return of 2% on owner's capital of $25,000 500 -interest on bank loan 1,000 - cost of supplies 27,000 - depreciation of capital equipment 8,000 - additional wages the owner could have earned in next best alternative 30,000 -risk premium of 4% on owner's capital of $25,000 1,000 The economic profits for this firm are ○ A. $83,000. B. $82,500. OC. $114,000. OD. $83,500. ○ E. $112,500.arrow_forward
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