Question

d. LY, for some integer k> 0 5. The following table contains quarterly nominal GDP in U.S. (billions of dol- lars). Let Y, denote the GDP at time t and let y, = ln (Y). (Show your calculations in a spreadsheet, e.g., in Microsoft Excel.) a. Plot the time series (Y). Can the underlying stochastic process be weakly b. Calculate the growth rate of nominal GDP by computing the percentage c. Plot the natural logarithm of the series (y,) and compare with part i., com- d. Repeat part i. by taking the first log-differences (in percentage), that is, e. Do you observe any significant differences between gır and gar computed in stationary of any order? Explain why or why not. changes of the series, that is, g,-100 × (Yt-Y,-)/ menting on stationarity and smoothness g21 100 X (V1--1). ii. and iv, respectively? Date GDP 2001-01-01 10021.5 10128.9 10135.1 10226.3 10338.2 10445.7 10546.5 10617.5 10744.6 10884.0 11116.7 11270.9 2004-01-0111472.6 11657.5 2001-04-01 2001-07-01 2001-10-01 2002-01-01 2002-04-01 2002-07-01 2002-10-01 2003-01-01 2003-04-01 2003-07-01 2003-10-01 2004-04-01 2004-07-01 11814.9 2004-10-0111994.8

Exercise 5 parts a-d (i-v)

Answer 1

The GDP deflator is an index that captures the rise in price, and it is calculated by dividing the nominal GDP with real GDP Mathematically, it is written as: GDP Deflator = Nominal GDP/Real GDP And the percentage change in price is calculated as the following: % Delta Price = GDP Deflator_t - GDP Deflator_t - 1/GDP Deflator_t - 1 By following the formula, the missing values will be: GDP deflator: It is an economic measure which measures the price level of all domestically produced commodities and services in a year. The formula for calculating GDP deflator is given below: GDP deflator = nominal GDP/real GDP times 100 Percentage increase in the price level is determined by taking the difference of the value in second period with the value in first period and then dividing the result by the value in the first period multiplied by 100.