Table 3.8 gives data on gross domestic product (GDP) for the United States for the years 1959
Question:
a. Plot the GDP data in current and constant (i.e., 2000) dollars against time.
b. Letting Y denote GDP and X time (measured chronologically starting with 1 for 1959, 2 for 1960, through 47 for 2005), see if the following model fits the GDP data:
Yt = β1 + β2 Xt + ut
Estimate this model for both current and constant-dollar GDP.
c. How would you interpret β2?
d. If there is a difference between β2 estimated for current-dollar GDP and that estimated for constant-dollar GDP, what explains the difference?
Table 3.8
Transcribed Image Text:
Year NGDP RGDP Year NGDP RGDP 2,441.3 2,501.8 2,560.0 2,715.2 2,834.0 2,998.6 3,191.1 3,399.1 3,484.6 3,652.7 3,765.4 3,771.9 3,898.6 4,105.0 4,341.5 4,319.6 4,311.2 4,540.9 4,750.5 5,015.0 5,173.4 5,161.7 5,291.7 5,189.3 1959 506.6 1983 3,536.7 3,933.2 4,220.3 4,462.8 4,739.5 5,103.8 5,484.4 5,803.1 5,995.9 6,337.7 6,657.4 7,072.2 7,397.7 7,816.9 8,304.3 8,747.0 9,268.4 9,817.0 10,128.0 10,469.6 10,960.8 11,712.5 12,455.8 5,423.8 5,813.6 6,053.7 6,263.6 6,475.1 6,742.7 6,981.4 7,112.5 7,100.5 7,336.6 7,532.7 7,835.5 8,031.7 8,328.9 8,703.5 9,066.9 9,470.3 9,817.0 9,890.7 10,048.8 10,301.0 10,703.5 11,048.6 1960 526.4 1984 1961 544.7 1985 1962 1986 585.6 1987 1963 617.7 1988 1964 663.6 1965 719.1 1989 1966 787.8 1990 1991 1967 832.6 1968 910.0 1992 1969 984.6 1993 1970 1,038.5 1,127.1 1,238.3 1,382.7 1,500.0 1,638.3 1,825.3 2,030.9 2,294.7 2,563.3 2,789.5 3,128.4 3,255.0 1994 1971 1995 1972 1996 1973 1997 1974 1998 1975 1999 1976 2000 1977 2001 1978 2002 1979 2003 1980 2004 1981 2005 1982
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 60% (10 reviews)
a The plot is as follows where NGDP and RGDP are nominal and real GDP b NGDPt 496268 25258 Year s...View the full answer
Answered By
Akshay Agarwal
I am a Post-Graduate with a specialization in Finance. I have been working in the Consulting industry for the past 8 years with a focus on the Corporate and Investment Banking domain. Additionally, I have been involved in supporting student across the globe in their academic assignments and always strive to provide high quality support in a timely manner. My notable achievements in the academic field includes serving more than 10,000 clients across geographies on various courses including Accountancy, Finance, Management among other subjects. I always strive to serve my clients in the best possible way ensuring high quality and well explained solutions, which ensures high grades for the students along-with ensuring complete understanding of the subject matter for them. Further, I also believe in making myself available to the students for any follow-ups and ensures complete support and cooperation throughout the project cycle. My passion in the academic field coupled with my educational qualification and industry experience has proved to be instrumental in my success and has helped me stand out of the rest. Looking forward to have a fruitful experience and a cordial working relationship.
5.00+
179+ Reviews
294+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
In a recent issue of the Canadian Economic Observer, Statistical Summary, find the data section entitled "National Accounts." In Table 1, "Gross Domestic Product," find data on gross domestic product...
-
Describe the effect on gross domestic product, employment, and inflation of each of the following: (a) war, (b) elimination of environmental regulations, and (c) cuts in welfare benefits.
-
Go to the Statistics Canada website (www.statcan. gc.ca) and find National Economic Accounts. Opening that link takes you to another link on Gross Domestic Product. There you will find data on the...
-
Laval produces lighting fixtures. Budgeted Information for Its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Overhead cost Direct labor...
-
Discuss the pros and cons of option 1, and prioritize your thoughts. What are the most positive aspects of these options, and what are the biggest drawbacks? Do the same for option 2 Which option do...
-
What is the "flip side" of an investment in debt securities?
-
\(450 \div 3^{2}-56 \div 2^{2}\) Perform the indicated calculation.
-
Ideal Manufacturing Company of Sycamore, Illinois, has supported a research and development (R&D) department that has for many years been the sole contributor to the company's new farm machinery...
-
Questions: 1. What is perhaps the most important item shown on the disclosure statement? Why? 2. What is included in the finance charge? 3. What amount will Sue receive from the bank? 4. Should Sue...
-
A pro-life group wanted to test the effectiveness of an antiabortion commercial. Two random samples, each of 250 respondents, were recruited in Atlanta. One group was shown the antiabortion...
-
Consider the sample regression Y i = 1 + 2 X i + u i Imposing the restrictions (i) u i = 0 and (ii) u i X i = 0, obtain the estimators 1 and 2 and show that they are identical with the...
-
According to Malinvaud (see footnote 11), the assumption that E(u i | X i ) = 0 is quite important. To see this, consider the PRF: Y = 1 + 2 X i + u i . Now consider two situations: (i) 1 = 0, 2...
-
A quantum number is not associated with an atomic electrons a. mass b. energy c. spin d. orbital angular momentum
-
Choose the stance against government intervention in foreign trade: Provide a stance (based on your last name)that argues either for or against government intervention in foreign trade. Describe both...
-
You work at a hospital as a Food Service manager and a patient, Mary, has been given a diet order for a pureed diet with moderately thickened liquids. a) How would you modify the hospital menu below...
-
6. (15%) Consider the nested loops shown below, where N is assumed to be a power of 2, i.e., N = 2k for some positive integer k. i=N; while (i>= 1) { j= i; while (j
-
Summarize a major economy-related problem currently faced by Japan. Subsequently, draw implications or/and ideas from the experiences of countries/regions other than Japan to resolve the problem. You...
-
Why did you select Windows or macOS as your operating System? What features did you find the most valuable? How do you use your computer at home or work? Think about the programs and features you use...
-
The following transactions represent practical situations frequently encountered in accounting for municipal governments. Each transaction is independent of the others. 1. The City Council of...
-
Give an example of transitory income. What effect does this income have on the marginal propensity to consume?
-
Fallow Corporation is subject to tax only in State X. Fallow generated the following income and deductions. State income taxes are not deductible for X income tax purposes. Sales...
-
Dillman Corporation has nexus in States A and B. Dillmans activities for the year are summarized below. Determine the apportionment factors for A and B assuming that A uses a three-factor...
-
Roger Corporation operates in two states, as indicated below. This year's operations generated $400,000 of apportionable income. Compute Roger's State A taxable income assuming that State A...
-
Abacus' legal fees for it's defense were? a.) were paid for by a wealthy donor b.) were paid for by the U.S. Government c.) paid for by their mortgage customers d.) were likely all paid for by Abacus
-
Discussion Board: Middle School and MoralsOverview The middle childhood stage deals heavily with moral judgement and behavior. This is certainly true when looking back on our own experiences during...
-
During the Great Depression: Multiple select question. there were massive bank failures. prices began to decline. there was a 50% unemployment rate by 1929. there was a massive migration from the...
Study smarter with the SolutionInn App