1.

Here is some data of real PC GDP in the US. Calculate the actual average growth rates
for each decade. Is there a significant difference between the two periods?

                              1970                     $20,915

                               1980                   $ 25,675

                              1990                     $32,157

                              2000                     $39,750

                              2010                     $42,189

Answer-GDP 1970-1980
GDP 1970 = $20,915
GDP 1980 = $25,675
GDP Growth from 1970 to 1980 = Difference (25,675- 20,915) =$4,760
GDP Growth Rate (%) = $4,760 / $20,915 (as a %) = 22.76%

GDP 1980-1990
GDP 1980-$ 25,675
GDP 1990-$32,157
GDP Growth from 1980-1990 = Difference (32,157- 25, 675) = $6,482
GDP Growth Rate (%) = $6,482/ $25,675 (as a %)= 25.25%

GDP 1990-2000
GDP 1990-$32,157
GDP 2000- $39,750
GDP Growth from 1990-2000= Difference (39,750-32,157) = $7,593
GDP Growth Rate (%)= $7,593/ $32,157 (as a %)= 23.61%
2. Briefly discuss three macroeconomic issues that have been in the news recently. Find articles
from newspapers or the internet that discuss these issues.

 Canada records surprise GDP decline

On August 31, Statistics Canada reported that real GDP in Canada fell by 0.3 percent in the
second quarter of 2021, ending three quarters of growth. The announcement comes nearly seven
weeks after the Bank of Canada reduced its asset purchase program during its July monetary
policy meeting.
The drop was attributed to decreases in "home ownership transfer costs," which fell 17.7%, and
exports, which fell 4%, according to the statistics authority. The rate of increase in household
spending has slowed to 0.1 percent, with motor vehicle purchases leading the way.

 No IMF bias towards ‘excessive austerity

According to a report, the International Monetary Fund was not biased toward "excessive
austerity" in the post-2008 period, but it still needs to change the way it designs programs.
From 2008 through 2019, the IMF's Independent Evaluation Office investigated growth
initiatives under IMF programs. “During the assessment period, the evaluation did not uncover
evidence of a consistent bias towards extreme austerity in IMF-supported programs,” the IEO
adds.

 What is the balance between the negative aggregate supply and demand effects of the
COVID-19 shock?
COVID-19 has had a demonstrable impact on supply: quarantines, factory closures, supply chain
interruptions, and reduced mobility have all had an impact on output.

The impacts on demand are more difficult to assess, but they are crucial from an economic
policy standpoint since we are more confident in our ability to address demand (via monetary
and fiscal tools) than supply shortages.
 References

 https://www.centralbanking.com/central-
banks/economics/macroeconomics/7871971/canada-records-surprise-gdp-decline

 https://www.bruegel.org/2020/03/three-macroeconomic-issues-and-covid-19/