Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download
Question:
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for the net worth of nonfinancial corporations (TNWMVBSNNCB) from the first quarter of 1952 until the most recent quarter available. Go to the web site of the National Bureau of Economic Research (nber. org) and find the dates for business cycle peaks and troughs (the period between a business cycle peak and trough is a recession).
a. What is a nonfinancial corporation? Give two examples. What is corporate net worth?
b. Describe how corporate net worth changes just before, during, and just after a typical recession.
c. Why did corporate net worth decline by so much during the recession of 2007–2009? How might the decline in corporate net worth have affected the severity of the 2007–2009 recession?
Step by Step Answer:
Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien