Question

3. You are going to get quarterly data for Nominal GDP, Real GDP and the GDP Price Index from the database compiled by the St. Louis Federal reserve bank (FRED). For each of these data sets, you can either find the numbers you need by moving the mouse on the graph to the correct location, or download the file into a spreadsheet. Whichever you find easier is fine.

Specifically:

Nominal GDP https://fred.stlouisfed.org/series/GDP

Real GDP https://fred.stlouisfed.org/series/GDPC1

GDP price index https://fred.stlouisfed.org/series/GDPCTPI

a) Find a quarter when the Real and the Nominal GDP are very close together. Then find the index number for that quarter and explain why that makes sense. (1 point)

b) Use the price index and Nominal GDP for the first quarter of 1980 to calculate the Real GDP in 1980. Then look at the Real GDP in the first quarter of 1980. Your answer should be close, but not exact due to a variety of statistical adjustments. (1 point)

Answer 1