When economists forecast economic growth, they base their forecasts on what is going on with key macro aggregates. Based on the aggregates, the economists can make conservative or progressive forecasts. Policy makers also determine which measures to implement depending on what is happening with key macro aggregates. That is, should they employ a contractionary or an expansionary policy? This assignment is intended to help you make a connection between theory and practice. By reviewing the aggregate of your choice and connecting that to related events and policy, you will attain a clearer picture of how the economy functions.

Instructions

The following are common macro aggregates:

1. Inflation
2. Unemployment
3. GDP
4. Trade
5. Interest rates
6. Exchange rates

Select one aggregate from the list. Collect data on that aggregate for the period 2015 to 2019. Ensure that your data are from a reliable source such as BLS, FRED, IMF/ World Bank, WTO etc. Once you have collected data organize it (tabulate, graphs/ figures) and analyze for trends. In order to make meaning of trends break it down to quarterly and annual data. Examine changes from quarter to quarter and explain the final observed annual value. In addition, analyze the changes from year to year.

In order to explain the trends, conduct some research (literature review) to uncover events that could have occurred and which could account for observed trends and changes. For instance, did the price of oil change? How could that have impacted prices, and hence inflation? Were there changes in policy such as tariffs and quota restrictions? Can you attribute observed trade data to those changes?