FRED Stacking GDP Assignment

Follow the directions in FRED GDP [login to view URL] the document (new file added) to produce your own graph of GDP for the United States. Note: Heads up, FREDs format has changed a little from the PDF above. The big change is that "Edit Graph" in order to add a new series (line) of data. You then click the "Add line" to search for the new series to add. The rest of the changes are cosmetic and user-friendly (like auto display of search results as you type). When you are ready to add the series (check the data series ID to make certain it is right) click on the data set and then select " Add data series" and it will be added to your graph. DO NOT WORRY IF THE DATES ARE NEWER IN THE DATA SET. FRED USES THE LATEST DATA, SO THE SERIES IDS WILL CHANGE. Please upload your graph (as a .pdf) and data (as .xls). Then answer the following questions: 1. Study the graph and describe how anyone component changed over time. 2. The graph shows that U.S. net exports have been negative since the mid-1970s. Suggest two or more reasons why Americans spend more on foreign goods and services than foreigners spend on U.S. exports. 3. The gray bars on your graph show recessions (periods of declining real income and rising unemployment, a significant decline in general economic activity extending over a period of time). Since 1947 there have been 11 such periods in the United States. Do you see a pattern in private firms’ spending before and during a recession? Why or why not? 4. What possible explanations there are for the changes in the share government spending contributes to real GDP and what has been the general trend of government spending over time? (To answer this question it might be helpful to do the following, return to FRED® and your real GDP components graph. Under the “Graph” tab, select “GRAPH SETTINGS.” Change the “Stacking” setting from “Normal” to “Percent.” Your graph now shows the percent share of each data series graphed.)