Question

Use the macroeconomic data in the table below for the US economy for 2017 and 2018 to answer the questions followed.

Year

NGDP in ‘000”

RGDP In ‘000’ In 2009 prices

RGDP Growth Rate %

GDPD

Inflation Rate %

u-Rate %

CPI

Inflation Rate %

2017 2018*

19,390.6 17,096.2 - ? - 4.4 245.12 -

19,956.8 17,379.7 ? ? ? 3.9 250.5 ?

* Estimated data from 2017 data, but very close. Sources: www.bea.gov and www.bls.gov 5a. Estimate the values and fill out the boxes with Questions marks. 5 pts

5b. Based on your estimated values from Q5a, briefly analyze the state of the US economy from year 2017 to 2018 and make a quick forecast for 2019 and 2020.

Answer 1

(b)As indicated by the information given and determined, the US economy is close to the regular rate of unemployment (4%).The Real GDP of the economy has increased at rate of around 1.65%. There is a difference in theinflation rate determined using the gdp deflator and CPI strategies. The CPIincludes just the goods purchased by the customers where as GDP deflator consider the basket of all goods produced domestically. The difference shows that the inflation rate in consumer goods is higher than the general inflation rate in economy.

From above, we can say that US economy will develop at around 1-1.5% genuine gdp growth rate (in light of the fact that the economy is nearly at its full limit level at the normal rate of unemployment).