Problem
Plot the 12-month percentage growth rates in real GDP and in total real government purchases from 1948 to 2012. Calculate these growth rates from quarterly data.
(a) Does there appear to be any relationship between the growth rates in GDP and in government purchases?
(b) What does your answer to part (a) tell you about the role in business cycles of fluctuations in government purchases?
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.