ECO 202 Final Project Complete.pdf - Macroeconomic Data...

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Macroeconomic Data Report 1950 - 1960Zachary MehlECO 202Dr. Wade1
ECO 202Ten-Year Period of U.S. Economic History Overview 1950 - 1960Some of the events that occurred during the 1950 -1960 time periodKorean War 1950-1953Diners Club issues the first credit cardsFederal-Aid Highway Act of 1956Vietnam War StartsThe Cold War BeginsSpace Race BeginsThere are a number of events that occurred during this timeframe that influenced the economy. In 1950 The United States entered into the Korean War that lasted three years. During the year 1950 Diners Club issues the first credit cards made out of cardboard and would grow to have 40,000 members within a year. President Eisenhower put into place the Federal-Aid Highway Act which called for 41,000 miles of highways and interstates to be produced based off of the Reichsautobahnen of Germany. Throughout this time period more and more military and economic resources were sent to Vietnam to fight communism. Throughout the 1950s the space race began between the United States and the USSR as they fought to be the first to explore space. 2
ECO 202Gross Domestic ProductGrowth Rate in Real GDP o1950, 3.8%o1951, 10.6%o1952, 5.2%o1953, 6.2%o1954, -1.8%Billions of DollarsYearReal Gross Domestic Producto1955, 6.2%o1956, 3.2%o1957, 3.0%o1998, -2.9%o1959, 7.4%o1960, 4.9%Growth rate in real GDP is calculated by amount from one year minus the amount from the previous year, then divide by the amount of the previous year and then multiply by 100 to get the percentage. From both the graph and the growth rates we can see that that several negative growth rates or recessions occurred during this ten year time frame, occurring in 1954, 1958 , and through 1960. 3
ECO 202How Events Gross Domestic Product GrowthGrowth through 1950-1953 and recession of 1954Military spending increases during the Korean War increasing GDPIn 1954 there is a small recession due to the end of the Korean WarRecession of 1958Unemployment would increase by 7%. Inflation Tight Monetary Policy Military spending would continue to increase throughout the Korean War. As the war came to an end there was no need for excessive spending which hurt the economy. This can be seen the small real GDP growth rate deceases by 1.8%. There was a drop in the need of durable goods forced nearly 7% of the total labor force out of work. There was an expectation that a recession would halt an increase in inflation, contrary to this prices continued to rise throughout the recession. Tight Monetary Policy added to the weak recovery and could not balance the gold outflow leading to increases in interest rates. This can be seen in the real GDP growth rate decreases by 2.9%. 4
ECO 202UnemploymentPercentageYearUnemployment RateUnemployment rate is calculated by taking the number of individuals that are unemployed divided by the number of individuals in the labor force. When one compares the GDP growth rate to unemployment rate where there is a decrease in the GDP growth rate there will be an increase in unemployment. During each recession indicated by the shaded sections unemployment rate increases. After the

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