1. One common economic measure that captures "value-created" isgross domestic product(GDP -- also called output) and another isprice level. create plots of GDP and prices over time and explore changes using a simple growth rate formula.

a) Navigate to the FRED St. Louis site:https://fred.stlouisfed.org/.Search forReal Gross Domestic Product.Click the first option: Billions of Chained 2012 Dollars, Quarterly, Seasonally Adjusted Annual Rate Q1 1947 to Q3 2020 (Dec 22). Explore the controls of the plot. Take a screenshot of the plot and paste it into your solutions. These interactive plots are a terrific resource for your group projects.

b) A simplegrowth ratecaptures the rate of change in percentage terms. For any two observations Y, you calculate one with the formula[Y(new)-Y(old)]/Y(old). Using information from your plot, calculate these two growth rates for GDP: growth between Q2 2009 and Q4 2019 and growth rate between Q4 2019 and Q2 2020. Show your calculations and describe them in words.

c) Start a new search on FRED for Consumer Price Index for All Urban Consumers: All Items in U.S. City Average. Plot this data by clicking. This plot illustrates what happens to prices over time. Explore the controls of the plot and paste a screenshot.

d) Calculate two growth rates for prices (this is otherwise known asinflation):August 2008 and Dec. 2008 and for April 2020 to Dec. 2020.

e) Looking at your two plots, describe the overall relationship between output and prices over time. What might account for this?