Evaluation of U.S. Economy
1. Within your group, research the ITT Tech Virtual Library or credible government Web sites for the four macroeconomic indicators for the U.S. for a period of 10 years between 1970-present:
- GDP-nominal and real
- Trade Balance
- Personal Income and Spending
- Manufacturing and Trade Inventories and Sales
2. Analyze the findings and comment on the economic growth of the U.S. during the period selected by you. Support your findings with proper rationale and calculations, wherever necessary. In your
analysis, include the following:
- Explanation of why you choose that period
- Application of the Keynesian equation
- Shares of consumption, investment, and government spending as a part of GDP. Use nominal GDP for these calculations.
- Biggest contributor in GDP.
- Consumer price index (CPI) and the GDP deflator using the chain-type price index for GDP.
- The inflation rate.
II. Comparison of U.S. Economy with Other Economies
Choose three countries that are considered "High Income Countries," three countries that are considered "Middle Income Countries," and three countries that are considered "Low Income Countries." The United States should be one of the "High Income Countries" you choose.
For each of the nine countries selected, find the following
o Real GDP per person
o Adult literacy rate (total)
o Life expectancy at birth (total)
o Infant mortality rate (per 1,000 live births)
o Physicians (per 1,000 people)
o Income share held by the highest 10% of the population
o Income share held by the lowest 10% of the population
After collating the required data, answer the following questions:
- What was the level of inflation during the time period relative to the history of inflation in the United States? What were the driving factors behind this trend?
- How does United States compare to the other two countries you chose in the high-income group, middle-income group, and low-income group?
- In which measures does the United States compare poorly against other countries and in which does it fare better?
- In general, what is the relationship between real GDP and other measures of well-being?
- Is real GDP a reasonable measure of standard of living? Why or why not?