Global Economic Issues

Economics 300

Homework Assignment 1

Due date: Friday, February 3, 2017. The assignment must be turned in at the start of class. No assignments will be accepted after Friday, February 3, 2017.

The assignment should be typed and graphs should be attached as requested.  Assignments that are not typed will not receive credit.

1.       Define Gross Domestic Product

2.        What does real GDP mean?

3.       What is the difference between read GDP and nominal GDP?

4.       What does real per capita GDP measure?

In answering questions 1-4 above, be sure to cite a source.

Visit the Bureau of Economic Analysis web site at www.bea.gov. On the main page you will find US Economic Accounts, National, and Gross Domestic Product, click there. Click on Interactive Tables: GDP and National Income and Product Account (NIAP) Historical Tables. Click on “Begin using the data”,  click on Section 1-Domestic Product and Income, click on Table 1.1.6

5.       Use options to select quarterly data from 1950 to most recent data.  Include this graph with your assignment.   

6.       In at most one double spaced page, describe what the graph suggests happened to the economy during this time.  Be sure to

a.       Compare initial and ending points

b.      Discuss the long-term trend

c.       Short-term variations (when, how long, depth, frequency, etc)

In the same BEA site, using Options and Download, download yearly Real Annual Gross Domestic Product for the US since 1950 to the most recent data into an excel sheet.  

Find and download the population data from 1950 to currently available data.  

7.       Calculate Real GDP per capita since 1950. Attach a graph of your results. This graph should have Real GDP per capita on the vertical axis and time on the horizontal axis. What is this variable measuring?

8.       In at most one double spaced page, describe what the graph suggests happened to the economy during this time.  Be sure to

d.      Compare initial and ending points

e.      Discuss the long-term trend

f.        Short-term variations (when, how long, depth, frequency, etc)

9.       When comparing whether on average people are doing better or worse in an economy, which variable should one use: Real Gross Domestic Product or Average Real Gross Domestic Product? Why?

10.   Using the graph on question 8, compared to mid-20^th century, how is the average American doing? Comparing today to the year you were born; how is the average American doing? 

HERE ARE THE MODIFIED QUESTIONS WITH ANOTHER DATA SET

Visit the FRED database at the Federal Reserve Branch in St. Louis.  This database is much easier to navigate and to collect data and graphs from.  For example, if you search real GDP it provides the various data available.  You should note that the first option is the same as what was requested in the non-modified question.  it is chained real GDP, where 2009 is the base year prices.  We will not cover "chained" GDP, but it is a modified real GDP that eliminates some problems when we have a long time series.  I can see that it is also quarterly for the Q used to describe the time frame of the data.

5.  Using the DOWNLOAD option in the top right corner download and include this graph with your assignment.

       6.       In at most one double spaced page, describe what the graph suggests happened to the economy during this time.  Be sure to

a.       Compare initial and ending points

b.      Discuss the long-term trend

c.       Short-term variations (when, how long, depth, frequency, etc)

The previous questions asked you to calculate real GDP per capital, but if you back out to the list of real GDP options you will find they have provide the data and no calculation is needed.

7.  Include a graph of real GDP per capita with your assignment.  What is the variable measuring.

8.       In at most one double spaced page, describe what the graph suggests happened to the economy during this time.  Be sure to

d.      Compare initial and ending points

e.      Discuss the long-term trend

f.        Short-term variations (when, how long, depth, frequency, etc)

9.       When comparing whether on average people are doing better or worse in an economy, which variable should one use: Real Gross Domestic Product or Average Real Gross Domestic Product? Why?

10.   Using the graph on question 8, compared to mid-20^th century, how is the average American doing? Comparing today to the year you were born; how is the average American doing?