Collect Annual Data For Nominal Gross Domestic Product

Collect Annual Data For Nominal Gross Domestic Product And Real Gross

Collect annual data for nominal Gross Domestic Product and real Gross Domestic Product for the years 1950 through 2014. Using Excel, put nominal GDP in the first column of your spreadsheet and real GDP in the second column of your spreadsheet. Then, graph both series of data on the same graph using a line graph. Place the graph to the right of the data columns in your spreadsheet. Can you tell from looking at the data if the U.S. has had positive inflation rates for most of the years in the data series? How can you determine the base year from looking at the graph? Submit your spreadsheet, titled with your last name, to the Dropbox on the course website.

Paper For Above instruction

The analysis of historical economic data, specifically the trends in nominal and real Gross Domestic Product (GDP), provides valuable insight into the economic conditions of the United States from 1950 to 2014. By examining these data series, we can infer important phenomena such as inflation rates, economic growth, and changes in purchasing power over time. Using Excel to visualize and interpret this data facilitates a clear understanding of these economic dynamics.

To begin, collecting comprehensive annual data on nominal and real GDP is crucial. Nominal GDP measures the market value of all finished goods and services produced within a country’s borders in current prices, reflecting the current economic output during each year. Real GDP adjusts for inflation, using a base year's prices to provide a clearer view of true economic growth by removing the effects of price changes. For the period from 1950 to 2014, this data can be sourced from reputable sources such as the U.S. Bureau of Economic Analysis (BEA) or the World Bank. Once the data is gathered, entering it into Excel with nominal GDP in the first column and real GDP in the second enables organized analysis.

Plotting these two data series on the same line graph allows visual comparison of economic output over time. The x-axis would represent the years from 1950 through 2014, while the y-axis depicts GDP values. Positioning the graph to the right of the data columns preserves clarity and ensures easy reference. The line graph typically displays the trends and fluctuations in GDP, revealing whether the economy experienced periods of growth, recession, or stability.

From examining the graph, one can infer whether the U.S. has experienced positive inflation rates for most of the dataset. Positive inflation rates imply that nominal GDP consistently exceeds real GDP, indicating that prices have generally increased over the years. If the nominal GDP line remains above the real GDP line throughout most years, it suggests sustained inflation. Conversely, periods where the two lines converge or intersect may indicate periods of deflation or negligible inflation. Consistently positive inflation rates are characteristic of a growing economy but can also have adverse effects if excessive.

Determining the base year from the graph involves identifying the year in which the real GDP curve is set to a specific constant or the year where the real GDP appears scaled to a value that facilitates comparison. Usually, the base year is chosen as the year in which the real GDP is normalized to 100, meaning the real GDP line remains constant at this level when viewed over time. In the graph, this appears as the point where the real GDP line is flat or is set to a reference value, allowing us to observe changes relative to this baseline. The base year thus provides a reference point for measuring inflation and economic growth over the subsequent years.

In conclusion, analyzing the combined trends of nominal and real GDP through graphical representation informs us about long-term inflation patterns and economic growth. The data indicates that from 1950 to 2014, the U.S. experienced predominantly positive inflation, consistent with a stable and growing economy. Identifying the base year helps contextualize these trends and provides benchmarks for measuring inflation and real growth over time. This exercise emphasizes the importance of visual data analysis in understanding macroeconomic variables and their impact on national economic health.

References

• U.S. Bureau of Economic Analysis (BEA). (2015). National Income and Product Accounts. Retrieved from https://www.bea.gov/national
• World Bank. (2015). World Development Indicators. Retrieved from https://data.worldbank.org
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