Employment in farm and nonfarm categories. Civilian employment is broadly classified by the federal government into two categories—agricultural and nonagricultural. Employment figures (in thousands of workers) for farm and nonfarm categories for selected years from 1980 to 2020 are given in the table below. Year Farm Nonfarm Year Farm Nonfarm 1980 3,364 95,938 2005 2,197 139,532 1985 3,179 103,971 2010 2,206 136,858 1990 3,223 115,570 2015 2,422 146,411 1995 3,440 121,460 2020 2,399 131,045 2000 2,464 134,427 Source: US Census Bureau.

a. Compute simple indexes for each of the two time series using 1980 as the base period.

b. Which segment has shown the greater percentage change in employment over the period shown?

c. Compute a simple composite index for total employment for the years 1980–2020. Use 1980 as a base period.

d. Refer to part

c. Interpret the composite index value for 2010. 14.11 GDP personal consumption expenditures. The gross domestic product (GDP) is the total national output of goods and services valued at market prices. As such, the GDP is a commonly used barometer of the US economy. One component of the GDP is personal consumption expenditures, which is itself the sum of expenditures for durable goods, nondurable goods, and services. The GDP for these components (in billions of dollars) is shown in the next table, in 5-year increments from 1970 to 2020.

a. Using these three component values, construct a simple composite index for the personal consumption component of GDP. Use 1970 as the base year.

b. Suppose we want to update the index by using 1980 as the base year. Update the index using only the index values you calculated in part

a, without referring to the original data.

c. Graph the personal consumption expenditure index for the years 1970–2020, first using 1970 as the base year and then using 1980 as the base year. What effect does changing the base year have on the graph of this index? Year Durables Nondurables Services 1970 90 229 330 1975 134 416 475 1980 226 573 956 1985 353 919 1,395 1990 497 994 2,344 1995 636 1,180 3,172 2000 916 1,543 4,371 2005 1,106 1,968 5,745 2010 1,089 2,336 6,923 2015 1,329 2,654 8,293 2020 1,441 2,820 9,557 Source: US Census Bureau.