Plot the unemployment rate in the US from 1980-2016 (Hint: Use the FRED web site). What...

Plot the unemployment rate in the US from 1980-2016 (Hint: Use the FRED web site). What is the average unemployment rate in this period? What is the most recent unemployment rate in the US?

Plot the percentage change (yearly) in the unemployment rate and the percentage change (yearly) in the real GDP from 1980-2016. What is the relationship between the fluctuations in the unemployment rate and the fluctuations in the real GDP?

Expert Solution

The unemployment rate measures the percentage of the unemployed population in the total labor force. The figure below gives the unemployment rate of the US economy from 1980 to 2016.

Figure 1

The average unemployment rate during this period is 6.4%.

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The US unemployemnt rate as of January 2019 is 4%.

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Figure 2

The graph above shows a countercyclical movement between two-time series data. That is the change in the unemployment rate moved opposite to change in real GDP. This is feasible since, as real GDP falls unemployment raises and vice-versa.

Rahul Sunny answered 2 years ago

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