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Name ________________________________________ Macroeconomics

Measuring the Economy: ch5 (part 2)

1. The following tables contain annual US economic growth rates. Plot them on the axis provided.

This graph illustrates the US Business Cycle for the past 30 years. Make some observations about thegraph that you drew.

7

6

5

4

3

2

1

0

-1

-2

-3

EconomicGrowthRate

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

Year

8/3/2019 Macro ICA Ch05 Part2

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2. The following tables contain a decade of GDP data for the US.

US Real GDP (in billions)

US Nominal GDP (in billions)

Calculate the GDP deflators for 2008 and 2009.

3. We can use the GDP deflator to measure inflation. The following formula tells us how.

Inflation rate in 2009 = GDP deflator for 2009 - GDP deflator for 2008 x 100GDP deflator for 2008

Calculate the annual inflation rate between 2008 and 2009.