(https://fred.stlouisfed.org/)

QUESTION 1 Use real GDP (GDPC1) and real potential GDP (GDPPOT) to construct the levels of real GDP and real potential GDP from 1947-present (use LINE 1 and LINE 2). Attach File Browse Local Files QUESTION 2 The levels of real GDP (Y) and real potential GDP (Y) are both increasing over time. Which of the following best describes how much the two variables have changed? O Potential GDP has increased more than GDP O They have increased about the same O It doesn't matter because they are not related O GDP has increased more than potential GDP QUESTION 3 Potential GDP fluctuates less and grows more smoothly over time than GDP. O True FalseQUESTION 4 Why is GDP sometimes higher than potential GDP and other times lower than potential GDP? O Because GDP is affected by the business cycle in the short run and potential GDP is not O Because the amount of capital (K) and labor (L) available in the macroeconomy changes slowly over time Unlike the microeconomic production possibilities frontier (PPF), actual output (GDP) in the short run can be produced in the region beyond the macroeconomic PPF (which is infeasible for individual firms and markets) O All of the above QUESTION 5 Actual GDP is estimated far into the future (beyond 2022) because it depends on long-run forecasts of things like population growth and technology trends, but potential GDP stops in 2022 because goods and services in the future have not been produced and sold yet. O True O False QUESTION 6 Use real GDP (GDPC1) and real potential GDP (GDPPOT) to construct the real output gap in percent from 1947-present (use LINE 1 only): Y - yPOT X 100 yPOT Attach File Browse Local FilesThe output gap is increasing over time because actual GDP is greater than potential GDP when the macroeconomy is in equilibrium (neither excess demand nor excess supply)- O True O False QUESTION 8 Match the following statements to their correct answers. The output gap is positive a. The macroeconomy is "just right" at a level that is "about right" for the long run The output gap is negative b. The macroeconomy is relatively strong and at a level below where it can be in the long run The output gap is about zero c. The macro economy is getting weaker and growing slower than it can in the long the output gap is increasing run The output gap is decreasing d. The macroeconomy is relatively weak and at a level below where it can be in the long run e. The macro economy is getting stronger and growing faster than it can in the long run QUESTION 9 Compare and contrast the output gap before and after 1980 and select the statement that best describes the difference between the two periods. The average output gap before 1980 is higher (around zero) than after 1980 (around -2.5 percent) O The output gap after 1980 takes longer to return to zero than it did before 1980 The output gap is always positive when the economy is in an expansion (white regions of the graph). O Answers (a) and (b) O None of the aboveQUESTION 10 First, use real personal consumption expendituresMake sure you construct the graph in the order presented in this question below. (PCE) of goods (DGDSRX1) from January 2002-present to plot the real PCE of goods as an index (use LINE 1 only). Second, use real personal consumption expenditures of services (PCESC96) from January 2002-present to plot the real PCE of services as an index (use LINE 2 only). NOTE: Change the units of both consumption variables from "billions of chained 2012 US dollars" to "Index (Scale value to 100 for chosen date)." Using indexes will make both lines directly comparable with base year 2002=100, properly reflecting differences in growth over time. Lastly, use the implicit price deflator for personal consumption expenditures (PCE) of goods (DGDSRD3Q086SBEA) and the implicit price deflator for personal consumption expenditures (PCE) of services (DSERRD3Q086SBEA) to construct the relative price (ratio) of goods versus the price of services (use LINE 3 only for the ratio). Be sure to multiply the ratio by 100. The base year for each deflator is 2012=100, so the base year for the ratio will be the same. Data for the price deflators starts in 1947, so change the time period of the graph to start in Jan 2002 (found above the graph in FRED next to the "Edit Graph" button, or using the slider at the bottom near the time periods). Attach File Browse Local Files QUESTION 11 The price of goods relative to the price of services is declining over time. O True O FalseQUESTION 12 The real consumption of goods and real consumption of services are both decreasing over time. O True O False QUESTION 13 Which statement best describes the increases of real consumption of goods and services? O Consumption of goods has grown slower than consumption of services, especially after the COVID-19 Pandemic O Consumption is growing the same for goods and services O Neither goods nor services consumption has changed, even after the COVID-19 Pandemic O Consumption of goods has grown faster than consumption of services, especially after the COVID-19 Pandemic QUESTION 14 Using microeconomic reasoning about supply and demand, what is the most likely explanation for the relationship between changes in the consumption of goods and services over time? O The government is encouraging consumers to buy more goods O Firms that produce services are going out of business more often than firms that produce goods O People tend to change the degree to which they prefer goods over services from time to time O Changes in the relative prices of goods and services are associated with changes in the relative demand for goods and servicesQUESTION 15 Use the implicit price deflators for personal consumption expenditures (PCE) of goods and services (DPCERD3Q086SBEA) and real personal consumption expenditures (PCECC96) to construct the level of the total PCE price deflator and the level of real PCE, or quantity of PCE (use LINE 1 and LINE 2; use the FORMAT tab to change the Y-Axis Position for LINE 2 to be "Right" instead of "Left"). Attach File Browse Local Files QUESTION 16 Which of the following statements best describes how the aggregate price of consumption and the aggregate quantity of (real) consumption have changed over time? O The price has increased and the quantity has decreased O The price and quantity of both have increased O The price has decreased and the quantity has increased O The price and quantity have changed about the same QUESTION 17 Using macroeconomic reasoning about supply and demand, what is the most likely explanation for the relationship between changes in the price and quantity of consumption? O The relationship reflects a supply curve O The relationship reflects a demand curve O The quantity is increasing because the macroeconomy is growing but the price is increasing because of inflation O None of the aboveQUESTION 18 10 points Save Answer Choose the graph that you found most interesting from this assignment and write a paragraph about the following: . Describe how the variables in the graph changed from the beginning to the end of the sample. . Explain why you found the graph most interesting in terms of macroeconomics. Be specific. . How did this graphing assignment help you to better understand the concepts in this week's material? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt E v A V TX .. . EE X2 X2 T The - + ABC BB v X EXE + P O WORDS POWERED BY TINY