Question

The following table shows data on a hypothetical country's Real GDP from 1970 through 1978: Real GDP Year (Billions of Dollars) 1970 192 1971 1972 1973 1974 1975 1976 1977 206 202 200 202 1978 210 ols The green line on the following graph shows the economy's long-term growth trend. ciples of Use the blue points (circle symbol) to plot the Real GDP in each of the years listed. (Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Next place the black point (plus symbol) on the graph to indicate the point on the Real GDP curve that definitely represents a peak. Finally, place the grey point (star symbol) on the graph to indicate the point on the Real GOP curve that definitely represents a trough.

Answer 1

% change 71=(192-190)/190*100=1.05%

1972=(196-192)/192*100=2.08%

1973=(204-196)/196*100=4.08%

1974=(206-204)/204*100=0.98%

1975=(202-206)/206*100=-1.94%

1976=(200-202)/202*100=-0.99%

1977=(202-200)/200*100=1%

1978=(210-202)/202*100=3.96%

Plot the points on graph basis the above-

Contraction in year 1975-1976 when real GDP falls and growth rate below zero

In 1978 growth rate is at 3.96% hence economy is in Expansion phase; Recovery is seen in 1977 when growth rate turn positive,contraction happen in 1975-76 and we can not term it peak since we do not have details for 1979