Question

1. Economic fluctuations and growth Real GDP (Billions of dollars) 376 380 388 408 404 Year 2000 2001 2004 2005 2006 2007 2008 400 412 The grey line on the following graph shows the economy's long-term growth trend Use the blue points (circle symbol) to plot the real GDP in each of the years listed. Be sure to plot from ieft to right. Line segments will automatically connect the points. Next, place the green triangle on the graph to indicate the point on the real GDP curve that definitely represents a pesk. Finally place the purple diamond on the graph to indicate the point on the real GDP curve that definitely represents a trough (Ch 08) Peak Trough YEAR year, and then on the following graph use the orange points (square symbol) to plot the percentage change in real GDP you've calculated, rounded to the nearest percent. For example, if the percentage change is 0.9804se, round it to -1 Calculate the percentage change in real GDP in each year, and then on the following graph use the orange points (square symbol) to plot the pecentage change in real GDP you've calculated, rounded to the nearest percent. For example, if the percentage change is-0.9804%, round it to-1. Hint: The percentage change in real GDP equals the change in GDP from the previous year to the current year. For example, the percentage change for 2001 can be calculated by finding the change in GDP from 2000 to 2001, dividing this change by the level of GDP in 2000, and then multiplying the result by 100%. For each year, plot the percentage change from the year before. For example, plot the growth rate from 2000 to 2001 using a Annual change (showing real GDP), this contraction is seen as a period in saring

Answer 1

Change in GDP from 2000to 2001 is 376-380=-4/376*100=-1.06=-1,2001 to 2002is 380-388=-8/380*100=-2.10=-2,2002 to 2003 is 388-408=-20/388*100=-5.15=-5,2003 to 2004 is 408-404=-4/408*100=-0.98=-1,2004 to 2005 is 404-396=-8/404*100=-1.98=-2,2005 to 2006=396-392=-4/396*100=-1.01,2006 to 2007is 392-400=-8/392*100=-2.04=-2,2007 to 2008 is 400-412=-12/400*100=-3.

The economy experienced a contraction in the years 2003 and 2008.On the first graph ,the contraction is seen as a period when real GDP was high. In the second graph the contraction is seen as a period in which the growth rate is low.

G&p o 3

The economy was facing a contraction in 2001 is false.This is because change in growth is -1 and real GDP is 384in 2001 as compared to 376 in 2000.