Business Cycles and Economic Outlook
1. What data from the BEA announcement supports the NBER decision that the U.S. is in a recession?
In December 2008 the National Bureau of Economic Research (NBER) declared that a recession had begun in the U.S. economy in December 2007.
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion (NBER Recession Announcement, 2008)
The conceptual framework of the accounts is illustrated by seven summary accounts, and detailed estimates are provided in approximately 300 supporting NIPA tables. The NIPA information is supplemented by a set of fixed-asset accounts, which show the U.S. stock of fixed assets and consumer durable goods (Concepts and Methods of the U.S. National, 2009).
2. What measures did the U.S. government take to increase GDP during this time?
"Government consumption expenditures and gross investment” consists of government purchases of investment measures final expenditures by Federal, state, and local governments. “Government consumption expenditures” represents the value of goods and services provided to the public by governments (such as defense or education). “Gross investment” consists of government purchases of equipment, software, and structures to use in producing those goods and services. These expenditures do not include government spending for social benefit programs (such as Medicaid), interest payments, and subsidies (Measuring the Economy, n.d.).
3. Recent GDP Data in Detail
a. Take a good look at the data. What are the areas of growth and decline? Was the data (growth rates) consistent throughout the period of time? Summarize your interpretation of the data in Table 1.
Overall I feel there are only a few areas of growth. The first being services personal consumption expenditures. The growth has been fairly consistent from 2006 to 2009 with only a couple instances of negative growth. Another area of growth is in the National Defense. However, it is...