[Author’s Name]
[Institution’s Name]
Essay on Economic Analysis
Introduction
Quantities produced prices |
Year 2004 |
Year 2005 |
CDs |
100 |
120 |
Tennis Racquets |
200 |
210 |
CDs |
20 |
22 |
Tennis Racquets |
110 |
120 |
Total GDP |
330 |
472 |
The questions from I-4 cannot be answered due to lack of information. The GDP deflator for 2004 as well as 2005 is not given which is essential for making out the value of real GDP.
Trends in US GDP
From the website of Bureau of Economic Analysis, the figures presented on the website are indicative of the GDP growth trends for last five decades. It indicates that the GDP over the years have been increasing at a rate of 1.8% per year and this is represented over the linear time trend. This indicates that the traditional view regarding the growth of US GDP is not quite wrong. In fact, the economy is following a steady growth route. However, many other variables when are considered indicate that the rates of investments have in fact increased tremendously over the past decades. Furthermore, the time frame of education that the individuals obtain has also increased and so has the time frame a scientist and any company spend on the research and development.
Many other variables also indicate an increase in both time and trend. This makes us think as to why, if the traditional view were correct, the rate of investment, by means of any variable, would increase over the years if the GDP growth rate were following a balanced and consistent route. In fact, under the assumption, the investment rates must have followed a stagnant path over the years. This increase in investment would in turn increase the per capita GDP rate over the years if we go by the book.....
