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Econ 104-01: Introduction to Macroeconomics…….Problem set 1……Prof.

Larudee……Spring 2016

Problem set 1: Real and current-dollar GDP and the GDP deflator (5% of your grade)
Due Friday, Feb. 5. Your TA will let you know whether you need to turn in a hard copy in discussion
section or submit it on Moodle, or both; he or she should let you know on Jan. 29.
In addition to helping you understand real vs. nominal GDP, this assignment should help you learn to use
primary sources, to create good-looking graphs using Excel, to do a few other basic Excel moves for
managing data, to copy graphs and tables into a Word document, and to write about data.
Always put this heading at the top of the page (does not need to be in boldface):
Your name
Your TA’s name
The number or meeting day/time of your discussion section
Problem set 1, [the due date]
Please start this assignment before Jan. 29; try to finish it by Monday evening, Feb. 1, leaving you lots of
time to get help from the IT people, your TA, or a tutor at the Learning Resources Center, 10th floor of the
library. Take a printout of this assignment with you when you seek help. Instructions for Mac (Excel 2008)
are on pp. 1-2. Excel 2013 for Windows supplementary instructions are on p. 3, but do also read pp. 1-2.
1) Find annual data (both current-dollar and real, or “chained-dollar”) for US GDP for 1929 to 2014. Go
to the Bureau of Economic Analysis website: www.bea.gov and click on Gross Domestic Product. Then
click on “Current-dollar and ‘real’ GDP (Excel)” and the file gdplev.xls should download automatically.
2) First, some housekeeping chores:
 Delete the quarterly data on this worksheet by putting your cursor on the lettered cells that head the
columns you want to delete (E, F, and G), and choosing DELETE.
 Make a backup copy of the worksheet in case you make a mistake. To do this on a Mac, choose
Edit/Move or copy sheet
and then, in the dialog box, click the box for “Create a copy”. Inside the inner box, choose where to put
the copied sheet. Save the Excel workbook again. Double click on the tab below each worksheet and give it
a label – for example, call the original “GDP DATA” and the copy “GDP DATA BACKUP”.
 Select all of row 7 by putting your cursor on the row number “7” in the column of numbers at left.
This should highlight the whole row.
THEN:
From the menu, click on Edit/Delete... [NOT “Delete sheet”!!]
Row 7 disappears, and now row 8 has become row 7, so just click on Delete again. Now the row headings
are just above the data, with no row of space in between. That’s what you want. Save the file.
3) The goal is to make two charts on which both real (chained-dollar) GDP and nominal (current-dollar)
GDP appear (one for 1929-2014, and one for 1990-2014), and to put them into a Word document in
which you also write about key features of the charts.
Select the whole array (rectangle) of cells with the annual data (both current-dollar and chained-dollar),
including the two column headings and the blank cell to their left (so cells A6:C92, if you followed all the
instructions above. Now choose
Charts/XY Scatter
and choose the unsmoothed line, without point markers. This should give you a chart with two lines: real
and current-dollar GDP from 1929 to 2014. (Do NOT use the “line” chart type; it is usually problematic
if you’re graphing two data series.)
Then move the chart from the data worksheet to a separate one. Do this by highlighting the chart frame
and choosing
Chart/Move Chart
Choose “New sheet” and give the sheet a short label that describes its content.

click on the BRUSH icon. Give the other line a different setting. (If you do.Problem set 1……Prof.. and make one of the lines thinner than the other so that the reader knows which is which. call it that now. If you would like to move the legend to below or above the chart (so you can increase the font size and it still looks OK). first make a copy of the chart worksheet. Write 200-300 words (1. The chart will change automatically. By choosing “Style” or “Dashed” you can change to a different style line. choose “Line” (again. 4) To get a close-up picture of the recent period. making observations about the data. Correct citations of government sources in Chicago Manual of Style format begin with U. using Edit/Copy Edit/Paste special Picture (from the menu) Label each chart (Figure 1. Save the file.S. you can sometimes delete the legend— though not in this case. choose Placement and then choose a location. and the level of real GDP. label the tab below. uses quarterly data). 2. to do this you need to understand how many billions or trillions of dollars each number refers to. Label this Figure 2 on the tab. A caption should make clear what is in the figure. You are welcome to make a chart of the GDP deflator. Now copy each chart into a Word document. Copy cells A7:A8 and paste them into cells D7:D8.) OPTIONAL: This is a chance to practice making a chart look professional. in the box. (The chart will be Figure 1 in your Word document. and then a number. however. Also. You can get ideas for captions by looking at graphs in the textbook. The change will automatically change the legend. then the year (it is listed in the first row of . Select cell B7. this is on a Mac) and choose black. enter =100*B7/C7 and hit Return.Econ 104-01: Introduction to Macroeconomics……. Now put the cursor over the lower right corner of cell E7 and double-click. Call yours Fig. If the years or numbers start to overlap when you do this. type Works cited. cite the source of the data (not just the URL). and then choose the “Weights and arrows” tab above and set the line to 3 or 4 point – whatever looks good to you. Why is the current-dollar GDP line steeper (rising faster) than the real GDP line? (Hint: think about price changes. Then click on the horizontal scale and change the minimum year to 1990.5 spaced). and below that. choose Scale and double the “Major unit”.) 3. Do the same with the horizontal scale. again. double-click on the graph line and then change the color of the lines to black (your Word document will probably be printed on a black and white printer). Do this by clicking on one of the lines. The formula should automatically fill all the way down to the bottom row (the year 2014).6 (which. Save the file. Figure 2) followed by a caption (phrase or sentence). Save the file. In this case the units are Billions of US dollars (current or chained). then the name of the overall agency (the full name of the BEA). 18 usually looks good. again using Edit/Move or Copy Sheet and label the sheet by typing a name in the tab below. down to 2014. Select cells D7:D8 and then place the cursor over the lower right corner and double-click. During what years was rising real GDP interrupted by a downturn? (When were there recessions?) Be as specific as you can. since it is needed to explain which line is current-dollar and which real GDP). What base year is used for real GDP? Does real GDP equal current-dollar GDP in that year? Is the GDP deflator 100 in that year? At the bottom of your assignment. it will look like Figure 5. 5) In the Excel worksheet. referring to specific years or decades. The years should fill into the column. 3. calculate the GDP deflator (one kind of general price index) by doing this: In cell E7. the measure of inflation used for GDP. so (on a Mac) choose View/Formatting Palette and then enter a label for the vertical scale. Click on the vertical scale and choose Font in the box that comes up. double click the legend. and click on E7. Always label the units on the vertical scale. It is usually a good idea to increase the font size to around 18 (use your judgment). Larudee……Spring 2016 In the new sheet. Answer these questions: 1.

Supplementary instructions for Excel 2013 for Windows (after downloading gdplev. In the Excel worksheet. you won’t create a new worksheet. so just click on Delete again. TO MOVE THE CHART TO A SEPARATE WORKSHEET: Click on the right-hand icon “Move Chart Location”. you probably want to click (twice) on the tab and give the new chart worksheet a different name. bottom row of icons in the chart section. End with “Available at” and type the URL. and click on D9.xls): Click on “Enable editing” (from the colored row that begins “PROTECTED VIEW”). That’s what you want. in sequence: HOME tab Cells group Format Organize sheets Move or copy sheet Be sure to click “Create a copy” in the box that comes up – if you don’t.  Select the years and the two columns of data this way: Put your cursor in cell A6 and drag it to the bottom right corner of the data (cell C92.  Select all of row 7 by putting your cursor on the “7” in the column of numbers at left. Now you the row headings are just above the data. This should highlight the whole row.  Choose INSERT (second menu item from the left) and then go to the center of the row of icons. Exactly as on a Mac. Row 7 disappears. choose these. The formula should automatically fill all the way down to the bottom row (the year 2014). and use and put the cursor over the lower right corner of it and double-click. if you’ve exactly followed all the instructions). in this case). To copy the chart worksheet to another worksheet. Now choose the last format – the straight line segments with no markers (not the bubbles). then click the little box “New sheet” and give the new sheet a short informative name. make the following calculations: A. click on Delete. such as Figure 1 GDP. After that. Then select cell B7. enter =100*B7/C7 and hit Return. with no row of space in between. THEN: From the menu (toward the right in the box “Insert Delete Format”. Do NOT choose the line format (that looks like a chain-link fence). Click on the axes with the dots – the last choice. Larudee……Spring 2016 the table). Go ahead and improve the appearance of the chart by clicking on various labels one by one – words or numbers – and increasing their font size to something like 18. then the name of the specific table (the first row of the worksheet. and now row 8 has become row 7.Econ 104-01: Introduction to Macroeconomics……. Then tell Excel where you want to put it.Problem set 1……Prof. where the charts are. such as Figure 2 GDP. click on the BRUSH icon. In cell D7. .