1.Calculate percentage annual growth rates using the data that follow.

(a)Productivity growth measures increase in output per hour of work. Output per hour was 75.7 in the first quarter of 1973, 103.7 in the first quarter of 1996, and 132.8 in the first quarter of 2004 (1992 = 100). Calculate the average annual rates of productivity growth between 1973 and 1996 and between 1996 and 2004. Using your answers, explain during which of these two periods living standards rose more quickly.

(b)The Consumer Price Index was 53.8 in 1975, 82.4 in 1980, 107.6 in 1985, 130.7 in 1990, 152.4 in 1995 and 172.2 in 2000 (1982-84 = 100). During which five-year interval was the annual inflation rate the highest? During which interval was the average annual inflation rate the lowest? What was the trend in inflation over the last quarter of the twentieth century? Hint: The inflation rate is the annual percentage change in the price index.)

(c)In the second quarter of 2000, real GDP (measured in billions of 2000 dollars) was 9,847.9. In the second quarter of 2001, real GDP was 9,905.4, and in the third quarter of 2001, it was 9,871.1. Calculate the percentage annual growth rates between the second quarters of 2000 and 2001, and the second and third quarters of 2001. Interpret your results.