Problem
We have seen that investment spending constitutes about 13 percent of aggregate demand (GDP) in the United States. Are other countries consistently investing more than 13 percent of their output?
a. Go to the Statistical Data Warehouse of the European Central Bank. Download data for the following two variables: GDP and gross fixed capital formation (just a different name for investment). Both can be found under "Prices, Output, Demand and Labour Market," "National Accounts and Output Indicators," and "GDP and Expenditure Components." To convert these series into constant prices, divide them by the GDP deflator that you can locate under "Prices, Output,
Demand and Labour Market," "Prices," and "Deflators." Use these series in constant prices to do part ( b ).
b. Calculate the share of investment in GDP ( IGDP 100). On average, what is the share of investment spending in aggregate demand in the European Union?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.