Suppose you are interested in isolating the cyclical component of a macroeconomic time series (such as GDP ). Give at least one reason why assuming a non linear trend would be preferable than assuming a linear trend.
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Suppose you are interested in isolating the cyclical component of a
Give at least one reason why assuming a non linear trend would be preferable than assuming a linear trend.
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- The following graph approximates business cycles in the United States from the first quarter of 1955 to the third quarter of 1959. The vertical blue bar coincides with periods of 6 or more months of declining real gross domestic product (real GDP). Notice that real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDP, such as the blue-shaded period in 1957, is known as . True or False: Small ups and downs in real GDP follow a consistent, predictable pattern. True False Which of the following probably occurred as the U.S. economy experienced declining real GDP in 1957? Check all that apply. Industrial production increased. Home sales increased. Consumer spending declined. Retail sales declined.Write down an equation of motion which takes into consideration technological advancement and what condition must be true if the economy is in the steady state. Be sure to label what the components are.Explain the purpose of trend line
- Why did Keynes’s conjectures hold up well in the studies of household data and short time-series, but fail when long time-series were examined?For example, an increase in the money supply, a __________ variable, will cause the price level, a _______ variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a variable. The distinction between real variables and nominal variables is known as ______.Household spending by all UK households amounted to over £500 billion in 1997, or 63% of gross domestic product. This level of expenditure is very closely related to conditions in the country's macro-economic environment. For marketers, it is crucial to be able to read the macro-economic environment and to predict the effects of change in demand for their goods and services. Identifying turning points in the economic cycle has become a work of art as well as science, as consumers frequently confound experts by changing their expenditure levels in a way which could not have been predicted on the basis of past experience. During the Autumn of 1998, mortgage rates in the UK were falling; unemployment was close to its lowest level for two decades; pay rises were keeping ahead of inflation; and share prices were recovering from their recent falls. Yet expenditure by British households was falling sharply. For three consecutive months retail sales fell in value, with retailers such as Marks…
- Macroeconomists are interested in two types of phenomena: economic growth and business cycles. Explain with comprehensive how macroeconomists manipulate economic data in order to study these two problems.Economic variables are sometimes divided into “leading indicators” and “lagging indicators.” Leading indicators are variables that start to change before an economic expansion or contraction. Lagging indicators change only when an expansion or contraction is well underway. Based on the graph of the unemployment rate, is unemployment a leading or lagging indicator of recessions? Explain. How can we use this information when providing advice to a company that sells goods to consumers?Why do economists and managers pay attention to the measurements of macroeconomic activity? several elements of these measurements such as durable goods, non-durable goods, etc