Please use the following links

https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions (for question 1)

https://fred.stlouisfed.org/ (for questions 2, 6, 10, and 14 to create the graphs)

QUESTION 1 How long are recessions, expansions, and business cycles? All FRED graphs like the ones you have created in previous assignments show recessions (also called contracations) as vertical, gray-shaded regions and expansions as the white area between recessions. Together, expansions and recessions define business cycles - one expansion and one recession are one business cycle. The "Peak" is the last month of the expansion and the "Trough" is the last month of the recession. The National Bureau of Economic Research (NBER) provides the official dating of U.S. business cycles here: US Business Cycle Expansions and Contractions NBER NBERAccording to the NBER, the Covid-19 Pandemic ended the longest US expansion (128 months) and involved the shortest US recession/contraction (2 months). Using the NBER business cycle dating, answer the following questions. Before 2020, what were the dates (beginning and ending months) and A. Null - Ignore duration (number of months from Peak to Trough) of the shortest US recession (contraction)? B. 75 months Before 2020, what were the dates (beginning and ending months) and C. Null - Ignore duration (number of months from Peak to Trough) of the longest US D. Mar 1991 to Mar 2001 (120) recession (contraction)? E. Mar 1919 to Jan 1920 (10) Before 2020, what were the dates (months) and duration (number of F. 41 months months from Trough to Peak) of the shortest US expansion? Before 2020, what were the dates (months) and duration (number of G. Oct 1873 to Mar 1879 (65) months from Trough to Peak) of the longest US expansion? H. 12 What is the average duration (number of months) of a US 1. 50 months recession/contraction? J. Jan 1980 to July 1980 (6) What is the average duration (number of months) of a US expansion? K. 17 months What is the average duration (number of months) of a US business L. 59 months cycle (Peak to Peak)? Null - Ignore Null - Ignore How many recessions/contractions occurred in the half-century 1946- present? What is the average duration (number of months) of US business cycles (Peak to Peak) from 1854-1945? What is the average duration (number of months) of US business cycles (Peak to Peak) from 1946-present?QUESTION 2 How much does inflation vary over the business cylce? Use the CPI (P) and core CPI (PC) from the data table above to construct a graph from 1958- present using LINE 1 and LINE 2. Convert each price index to inflation by changing the Units to "Percent Change from a Year Ago.' Attach File Browse Local Files QUESTION 3 Before the mid-1980s, total CPI inflation and core CPI inflation moved together closely and varied over time by roughly the same amount (between 0 and 15 percent). O True O False QUESTION 4 Which statement best describes the relative variation over time in total CPI inflation and core CPI inflation since the mid-1980s? O Core CPI inflation varied much less than total CPI inflation O Both inflation rates were roughly stable during this period O Core CPI inflation varied much more than total CPI inflation O The two inflation rates varied about the same amountQUESTION 5 Both inflation rates tend to decline during or shortly after expansions, although the magnitude and pattern of decline differ by recession. O True O False QUESTION 6 How similar are the output gap (Y-YN) and cyclical unemployment rate (U"=U-UN) as measures of short-run fluctuations? Use real GDP (Y), real potential GDP (Y = YN), the unemployment rate (U), and the natural rate of unemployment (UN) from the data table above to construct a graph from 1949-present using LINE 1 and LINE 2. For LINE 1, construct the output gap = ((Y-YN)/YN)*100 and for LINE 2 construct the cyclical unemployment rate U" = U - UN. NOTE: All data should be quarterly frequency. Attach File Browse Local Files QUESTION 7 The output gap and cyclical unemployment rate are negatively correlated over the business cycle (move up and down in the opposite direction over time). O True O FalseQUESTION 8 Which statement best describes the magnitudes of fluctuation in the output gap and cyclical unemployment for each business cycle (one recession and one expansion) since 1950? O The variables fluctuate about the same amount in each business cycle O The variables fluctuate by very different amounts in each business cycle O Neither variable fluctuates much in a business cycle O None of the above QUESTION 9 Since 1950, the output gap has varied a little less than cyclical unemployment (as measured by the differences between the approximate minimum and maximum values for each variable). O True O False QUESTION 10 How well do consumers expect inflation? Use the core CPI (P") and expected inflation (Michigan survey) from the data table above to construct a graph from 1978 to present using LINE 1, LINE 2, and LINE 3. For LINE 1, construct core inflation by converting core CPI (P") to Units of "Percent Change from a Year Ago." For LINE 2, just plot expected inflation and make sure the Units are "Percent" (not "Percent Change from a Year Ago.") For LINE 3, use these same two variables to construct the inflation expectation error as (core inflation - expected inflation). Use the same units as in the previous graphs (core CPI unit is "Percent Change from a Year Ago" minus expected inflation unit is "Percent.".) NOTE: The expectation error (difference between core inflation and expected inflation) is not exactly the same as the price expectation error in levels described in the textbook, (P - PE), but it is very similar because it is the difference in growth rates. Attach File Browse Local FilesQUESTION 11 On average, consumers' inflation expectation generally are about the same rate as core inflation and the two variables move together over time, although there are periods when they differ somewhat for a while. O True O False QUESTION 12 Which of the following statements best describes the inflation error? O The error is rising steadily over time O The error is typically positive during recessions and negative during expansions O The error tends to be positive when inflation is relatively high and negative when inflation is relatively low O On average, the error is about zero (0%) every year QUESTION 13 The inflation expectation error never changes by relatively large amounts (2 percentage points or more) over short periods of time. O True O FalseQUESTION 14 Is the theory of an upward sloping short-run aggregate supply (SRAS) curve supported by US data? Use real GDP (Y), real potential GDP (YPO = YN), the core CPI (PG), and expected inflation (Michigan survey) from the data table above to construct a graph from 1978-present using LINE 1 and LINE 2. For LINE 1, construct the output gap, ((Y-YN)/YN)*100. For LINE 2, construct the same inflation expectation error (difference between core inflation and expected inflation) in the previous graph as core CPI (PC) inflation (Units of "Percent Change from a Year Ago") minus expected inflation (Units of "Percent.") Attach File Browse Local Files QUESTION 15 Chapter 20 of the textbook teaches that the SRAS curve predicts that the output gap (Y - YN) and unexpected price (P - PE) should be positively related (by the parameter a) over the business cycle because unexpected prices (higher or lower than expected) cause output (real GDP) to deviate from the natural rate of output (higher or lower output gap). Which of the following statements best describes how the relationship between the two variables in this graph relate to the textbook theory of the SRAS curve? O The variables are trending in opposite directions O The variables tend to be negatively correlated most of the time, in contrast to the theory of the SRAS curve O The variables clearly are positively correlated all the time, as predicted by the theory of the SRAS curve O The variables are only positively correlated during recessions, as predicted by the theory of the SRAS curveQUESTION 16 Chapter 22 (section 222d) describes the shortrun Phillips curve as a mgatlve relationship between the cyclical unemployment rate and unexpected ination. Which of the following statements best describes how the relationship between the two variables in this graph relate to the textbook theory of the Phillips curve? C The variables tend to be positively correlated until the 2000s, in contrast to the theory of the Phillips curve C) The variables may be somewhat negatively correlated during the 2000s and 2010s but the correlation is not clear of stable overtime C) The strongest evidence for a negative correlation between the variables is during the 20205 {COVlD19 Pandemic and afterward) C) None of the above '3' All of the above FRED Data Required To complete this assignment, students will need the following variables from FRED: FRED Variable Concept Mnemonic Description (units) Nominal GDP (P x Y) GDP Gross Domestic Product ($billions) Real GDP (Y) GDPC1 Real Gross Domestic Product (2012 $billions) Real Potential GDP or Natural Rate of Output (YPOT = YN, GDPPOT Real Potential Gross Domestic Product (2012 $billions) CPI (P) CPIAUCSL Consumer Price Index for all Urban Consumers (1982-1984 = 100) Core CPI (PC) CPILFESL Consumer Price Index for all Urban Consumers less Food and Energy (1982-1984 = 100) Expected Inflation MICH Survey of Consumers, U or Michigan: Inflation Expectations, Median 12-months ahead Unemployment Rate (U) UNRATE Unemployment Rate (%) Natural Rate of Unemployment (UN) NROU Non-cyclical rate of unemployment Graphs to Create Create the following graphs in FRED, download them and insert the .png files into the respective portion of this assignment