ManEC453 HW1

ManEC453 HW1 - Eric Schneck Brigham Young University...

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Unformatted text preview: Eric Schneck Brigham Young University Department of Finance ManEc 453 Money, Banking and Financial Markets Due: Objectives: Become familiar with macroeconomic data sources on the WWW Review the concepts of GDP, unemployment, inflation and housing starts Questions : 1. The business cycle can be defined as the movement of real GDP over time. Define the term " recession" A decline in the overall economic activity. 2. Identify, by time periods, the recessions that have occurred in the US since 1967. dec 69- nov 70 nov73-mAR75 JAN - JULY 80 JULY 81-NOV 82 july90 - mar 91mar-nov 91 dec 2007 - current 3. Find the current level, maximum and minimum values from 1967 to the present for: a) Real GDP growth rate (Use quarterly data) curr. =1.6% max = 16.9% min = -7.9% b) Unemployment rate (Use monthly data) current = 9.5 max = 10.8 min = 3.4 c) Housing starts (Use annual data for max & min; use monthly Current- 546000 Max = 2068100 Min = 553900 data for current level) Possible sources of data for the above: www.bls.gov www.nber.org www.bea.gov www.nahb.org www.economagic.com www.whitehouse.gov/administration/eop/cea/economic-report-of-the-president 4. a) Does the Unemployment Rate coincide with, lead or trail the busniess cycle? Trails b) Do housing starts lead, coincide, or trail the business cycle? Trails 5. a) What was the annual inflation rate (measured as Dec over Dec) in 1974? In 1984? 1974 = 11% 1984 = 4.3 b) Suggest a reason for the difference. The interest rate in the 80's went up, causing inflation to decrease Problem Set #1 September 2, 2010 Brigham Young University Department of Finance Money, Banking and Financial Markets aximum and minimum values from 1967 to the present for: (Use annual data for max & min; use monthly se.gov/administration/eop/cea/economic-report-of-the-president ent Rate coincide with, lead or trail the busniess cycle? l inflation rate (measured as Dec over Dec) in 1974? In 1984? ...
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