ECON. 214: INTERMEDIATE MACROECONOMIC THEORY
ASSIGNMENT 2.

This problem set utilizes data from www.economagic.com.
1.  Click on "most requested series". Generate graphs for the following variables with the starting year being 1990.

  • Inflation (CPI) (Monthly inflation at annual rates).
  • Unemployment rate.

    • Based on these graphs answer the following questions:
    a) Was inflation rising, falling or more or less constant during the 1990's?  How does this compare to the last few years?
    b) What years have we seen relatively high unemployment rates?  What is the current unemployment rate?

    2. Use the search feature to find the following variables (or you can click on 'Browse Data Titles', and then 'Federal Reserve, St. Louis Macroeconomic data' - 'US GDP and Components'):

  • Real Personal Consumption expenditure Billions  of Chained 2005 Dollars, SAAR.
  • Real Gross Private Domestic Investment; Billions of  Chained 2005 Dollars, SAAR
  • Real Federal Consumption Expenditures & Gross Investment; Billions of Chained 2005 Dollars, SAAR.

    • In each case, generate a graph (starting year being 1987) with the variable AND the Percentage change of the same variable (in the same graph).
    To do this, first locate the variable and generate the chart.  Then scroll down the page and click on "Period-to-period percentage change at annual rates" under the heading "Transformations on Right Scale".
    Modify the title of the graph: Your Name ; the name of the variable.  Click on "Make Chart".

    Based on those graphs answer the following questions:
    a) Which variable is more volatile: Consumption or Investment?
    Should you be looking at the $values or the percentage changes?  Why?
    b) Why do you think one of those variables is much less volatile than the other one? (give at least two potential reasons).

    3. Use the search feature to locate:

  • Real Net Exports of Goods & Services; Billions of  Chained 2005 Dollars, SAAR .

    • Generate a graph (starting year 1987).

    Based on this graph answer the following questions:
    a) Has NX been increasing or decreasing since 1987?  Is the U.S. importing less than it is exporting?
    b) Does NX have any implications for the foreign debt position of the country? (i.e. does NX affect total foreign debt).


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