QUESTION 1 Download the variable ‘real GDP’ for the United States from the St. Louis Fred...

QUESTION 1

Download the variable ‘real GDP’ for the United States from the St. Louis Fred data base and save it in Excel (the last four digits of the FRED code are DPCA). Create a second column and take the natural logarithm of the variable. What is the value of ln(RGDP) in year 2012? Next, plot both series. Which graph appears to grow steeper in latter (i.e. last 40) years?

(*hint: Due to the scale difference between the two graphs, you will likely want to right click and “Format Data Series” and select secondary axis so that one of the data series will have Y- axis values on the right side of the graph.)

QUESTION 2

Download the variable ‘real GDP’ for the United States from the St. Louis Fred data base and save it in Excel (the last four digits of the FRED code are DPCA). Create a second column and take the natural logarithm of the variable. Plot both series. Which graph appears to grow steeper in latter (i.e. last 40) years?

(*hint: Due to the scale difference between the two graphs, you will likely want to right click and “Format Data Series” and select secondary axis so that one of the data series will have Y-axis values on the right side of the graph.)

a.RGDP

b.ln(RGDP)

Expert Solution

Below is the graph for Real GDP and log of Real GDP:

1. The value of Real GDP in 2012 is 9.6925.

2. Real GDP graph (blue line) grows faster than the log of Real GDP( red line) and hence its steeper than log of Real GDP.

Below are data series that were download from FRED website:

Date	GDPCA	ln(RGDP)
1929-01-01	1109.448	7.011618
1930-01-01	1015.058	6.922701
1931-01-01	950.037	6.856501
1932-01-01	827.495	6.718403
1933-01-01	817.265	6.705963
1934-01-01	905.594	6.808591
1935-01-01	986.231	6.893891
1936-01-01	1113.291	7.015076
1937-01-01	1170.344	7.065053
1938-01-01	1131.564	7.031356
1939-01-01	1222.375	7.108551
1940-01-01	1330.151	7.193048
1941-01-01	1565.778	7.356138
1942-01-01	1861.500	7.529138
1943-01-01	2178.390	7.686341
1944-01-01	2351.627	7.762863
1945-01-01	2328.626	7.753034
1946-01-01	2058.375	7.629672
1947-01-01	2034.814	7.61816
1948-01-01	2118.512	7.658469
1949-01-01	2106.559	7.652811
1950-01-01	2289.546	7.736109
1951-01-01	2473.758	7.813494
1952-01-01	2574.898	7.853565
1953-01-01	2695.614	7.899381
1954-01-01	2680.023	7.893581
1955-01-01	2871.198	7.962485
1956-01-01	2932.388	7.983572
1957-01-01	2994.132	8.00441
1958-01-01	2971.951	7.996974
1959-01-01	3178.182	8.064065
1960-01-01	3259.971	8.089474
1961-01-01	3343.546	8.114787
1962-01-01	3548.409	8.174255
1963-01-01	3702.944	8.216883
1964-01-01	3916.280	8.272898
1965-01-01	4170.750	8.335851
1966-01-01	4445.853	8.399727
1967-01-01	4567.781	8.426783
1968-01-01	4792.315	8.474769
1969-01-01	4942.067	8.505539
1970-01-01	4951.262	8.507398
1971-01-01	5114.325	8.539801
1972-01-01	5383.282	8.591054
1973-01-01	5687.207	8.645975
1974-01-01	5656.465	8.640554
1975-01-01	5644.843	8.638498
1976-01-01	5948.995	8.690978
1977-01-01	6224.086	8.736182
1978-01-01	6568.608	8.790057
1979-01-01	6776.580	8.821228
1980-01-01	6759.181	8.818657
1981-01-01	6930.710	8.843718
1982-01-01	6805.758	8.825524
1983-01-01	7117.729	8.870344
1984-01-01	7632.812	8.940212
1985-01-01	7951.074	8.981062
1986-01-01	8226.392	9.015103
1987-01-01	8510.990	9.049114
1988-01-01	8866.498	9.090035
1989-01-01	9192.134	9.126103
1990-01-01	9365.494	9.144787
1991-01-01	9355.355	9.143704
1992-01-01	9684.892	9.178322
1993-01-01	9951.502	9.205479
1994-01-01	10352.432	9.244977
1995-01-01	10630.321	9.271466
1996-01-01	11031.350	9.308496
1997-01-01	11521.938	9.352008
1998-01-01	12038.283	9.395847
1999-01-01	12610.491	9.442284
2000-01-01	13130.987	9.48273
2001-01-01	13262.079	9.492664
2002-01-01	13493.064	9.509931
2003-01-01	13879.129	9.538141
2004-01-01	14406.382	9.575427
2005-01-01	14912.509	9.609956
2006-01-01	15338.257	9.638105
2007-01-01	15626.029	9.656693
2008-01-01	15604.687	9.655327
2009-01-01	15208.834	9.629632
2010-01-01	15598.753	9.654946
2011-01-01	15840.664	9.670336
2012-01-01	16197.007	9.692582
2013-01-01	16495.369	9.710835
2014-01-01	16899.831	9.735059
2015-01-01	17386.700	9.763461
2016-01-01	17659.187	9.779011
2017-01-01	18050.693	9.800939
2018-01-01	18566.442	9.829111

PS: Both questions 1 and 2 are same questions only.

Rahul Sunny answered 2 years ago

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