Problem

Many public interest groups assert that the federal government expends an increasing porti...

Many public interest groups assert that the federal government expends an increasing portion of the nation’s resources on the nation’s defense. The following table contains the outlays (in billions of dollars) for the Defense Department since 1980 and the outlays as a percentage of gross national product (% GNP).

Year

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

Outlay

134

158

185

210

227

253

273

282

290

304

299

273

298

291

282

272

266

267

% GNP

4.9

5.2

5.8

6.1

6.0

6.2

6.2

6.1

5.9

5.7

5.3

4.7

4.9

4.5

4.1

3.8

3.6

3.4

a. Plot the outlay time series data and describe any trends in the outlays.


b. Plot the % GNP time series data and describe any trends in the % GNP.


c. Do the two time series have similar trends? Do either of the plots support the public interest group’s contention?

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