Question

SECTION E-22 Points CNBC-October 15, 2019 The Bureau of Economic Analysis (BEA) announced today that gross domestic product, the widest measure economic activity, grew at a meager 0.9 percent annualized rote in the third quarter. Compared to the first six months of 2018, the U.S. economy in the first three-quarters of 2019 grew just 1.6 percent, a pronounced slowdown relative to the 3.9 percent growth in the second half of 2018. Some of this slowdown can be explained by a negative contribution from inventory investment, which contracted 0.9 percent in the third quarter. There is plenty to worry about in this report, as it showed U.S retail sales fell for the first time in seven months in September, although overall consumer spending which comprises about 66 % of the U.S. GDP activity was up 0.4 % Capocity utilization also decreased 0.4 percent in the 3rd quarter to 74.5%. Ela-Write a phrase from the article that speaks to a change in household consumption in the 3rd quarter 2019. E1b-From information in the article, did Household Consumption increase or decrease in the 3rd quarter 2019. E2a-Write a phrase from the article that speaks to a change in investment in the 3d quarter 2019. E2b-From information in the article, did Investment increase or decrease in the 3rd quarter 2019. E3- Write a phrase from the article that speaks to potential GDP. E4a-On the real GDP axis below, insert potential GDP (Y*) relative to 3d based on information in the article. quarter real GDP Y(30,19) E4b-On the same real GDP axis above, insert real GDP in the 2nd quarter of 2019 (20,19) relative to real GDP in the 3rd quarter 2019 based on information in the article.

Answer 1

Due to HOMEWORKLIB POLICY, I would only be answering the first four parts

E1a. "Although overall consumer spending which comprises of 66% of the US GDP activity was up to 0.4%"

E1b. On the basis of the information provided in the article household consumption increased in the third quarter. Household consumption is equivalent to consumer spending, hence, an increase in consumer spending also means an increase in household consumption.

E2a. "Some of this slowdown can be explained by a negative contribution from inventory investment which contracted 0.9% in the third quarter."

E2b. On the basis of the article provided above investment definitely decreased in the third quarter 2019.