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1. The broadest stock index in the United States is the Wilshire 5000. The more known index is the Dow Jones Industrial Average, but
1. The broadest stock index in the United States is the Wilshire 5000. The more known index is the Dow Jones Industrial Average, but only includes 30 stocks. Plot both indexes (FRED code: WILL5000PR) and (FRED code: DJIA) over the period 1971 to the present. Comment on the pattern since the 1980s and note the events or circumstances occurring in the United States where you see periods of rapid increases or decreases. 2. Financial crisis is often associated with rising, and then persistently high, unemployment rates. Review the U.S unemployment rate (FRED code: UNRATE) over the last 100 years. Analyze the rates and identify at least 3 periods of high unemployment. What events or circumstances were occurring in the United States during these times that impacted unemployment rates? 3. Commercial banks have become increasingly involved in the real estate market. Plot the percentage change from a year ago of real estate loans made by commercial banks (FRED code: REALLN), and discuss the relationship between booms and busts in real estate lending and the expansions and recessions in the U.S. economy.
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