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step by step explanations please! Q10. The volatility of investment. Below are three plots: the first two show the annual percentage change in investment (blue

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Q10. The volatility of investment. Below are three plots: the first two show the annual percentage change in investment (blue line) and GDP (red line) since 1950 for the United Kingdom7 (top) and the United States8 (bottom - the US plot also has US recessions shaded in grey). The third plot shows the level of investment in Es and $s for the UK & US'. From the pictures, it's clear that investment is more volatile than GDP. Why? FRED.~ - Real Investment Expenditures in the United Kingdom@ Real Gross Domestic Product at Market Prices in the United Kingdom@ 30 20 10 Percent Change from Year Ago 0 -10 20 -30 1960 1970 1980 1990 2000 2010 fred.stlouisfed.org myf.red/g/cyiw FRED.~ - Real Gross Private Domestic Investment - Real Gross Domestic Product 70 60 50 40 30 Percent Change from Year Ago 20 10 O -10 -20 -30 1950 1960 1970 1980 1990 2000 2010 fred.stlouisfed.org myf.red/g/cyiqFRED~ - Real Gross Private Domestic Investment (left) Real Investment Expenditures in the United KingdomO (right) 90,000 3,200 80,000 2,800 70,000 2,400 60,000 2,000 50,000 Millions of Chained 2013 British Pounds Billions of Chained 2009 Dollars 1,600 40,000 1,200 30,000 800 20,000 400 10,000 0 1950 1960 1970 1980 1990 2000 2010 fred.stlouisfed.org myf.red/g/cyiBFRED - Real Consumption Expenditures in the United Kingdom@ - Real Investment Expenditures in the United Kingdom 30 20 10 Percent Change from Year Ago 0 -10 -20 -30 1960 1970 1980 1990 2000 2010 fred.stlouisfed.org myf.red/g/cykp

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