Part I: Generating Graphs

In this part, you're asked to generate the graphs for three key indicators over the period 1970-2013using the website of the Federal Reserve Bank of Saint Louis http://research.stlouisfed.org/fred2/graph/ and the step-by-stepinstructions below.

A. Graph of real GDP growth rate

1. Click on the link above. You can enter and adjust your date range in the upper right corner boxes, or do this later using the bar slide under the generated graph.

2. Do not change anything under "Graph Settings." Under "Add Data Series" type in "GDPC1" in the box.Then click on the series full name and the "Add Series" button to generate a graph (this gives you the graph of the level of GDP at the top of the screen).

3. Make the following transformationsunder "Edit Data Series" (leave everything else unchanged) to get the graph of the annual rate of growth of real GDP.

a. Frequency: Annual

b. Units: Percent Change from a Year Ago

4. You can use the "Export" tab under the generated graph to save it as "JPG" file and then add it to your assignment.

B. Graphs of the inflation and unemployment rates together

1. On a new screen, click on "Add Data Series."

2. Type in "UNRATE" in the "Search" box. Click on series name to generate a graph for the "Civilian Unemployment Rate." Change the frequency to "Annual" under "Edit Data Series."

3. Stay on the same screen. Click on "Add Data Series" again.Type in "CPIAUCSL" in the"Search" box and thenclick on series name and "Add Series" button. (This adds the CPI level to the UNRATE graph).

4. Make the following transformationsunder "Edit data Series" (leave everything else unchanged):

a. Frequency: Annual

b. Units: Percent Change from a Year Ago. (This converts the CPI level to the inflation rate).

5. You can use the "Export" tab under the generated graph to save it as "JPG" file and then add the graph to your assignment. Also download the data for these two variables (click on "Download Data" on the upper left part of the screen. Print the Excel data sheet and staple it to your assignment.

Part II: Short Essay Questions

1. Using the graph in Part I.A, list the approximate periods associated with the largest, the second largest, and the third largest declines in real GDP since 1970.

2. Using the UNRATE graph in Part I.B, identify two periods associated with the highest unemployment rate since 1970.

3. Visually inspect the graph in Part I.B andidentify the approximate period that corresponds to the highest value of the "misery index."