Great Deal! Get Instant $10 FREE in Account on First Order + 10% Cashback on Every Order Order Now

Question 1 (25 points): Jack lives in Boston. Sam lives in Seattle. Fill in the blank cells of the table below. Show your work by typing in the formulas you use. Visit the Inflation page at the U.S....

1 answer below »
Question 1 (25 points): Jack lives in Boston. Sam lives in Seattle.
Fill in the blank cells of the table below. Show your work by typing in the formulas you use.
Visit the Inflation page at the U.S. Bureau of Labor Statistics web site (http:
www.bls.gov/cpi/). Download data for the nonseasonally-adjusted CPI-U All Items for Boston and Seattle. Use annual averages, which have the column heading: “Annual.”
    
    
    
    Compound Annual Percent Change
    
    2015
    2016
     XXXXXXXXXX
    Jack earned in Boston
    $40,000
    $54,000
    
    Sam earned in Seattle
    $57,000
    $85,000
    
    
    
    
    
    CPI-U All Items for Boston
    
    
    
    CPI-U All Items for Seattle
    
    
    
    
    
    
    
    Jack’s real earnings in Boston
    
    
    
    Sam's real earnings in Seattle
    
    
    
a) From the CPI-U data above, are prices higher in Boston or Seattle? Explain fully.
) What happened to real earnings between 2015 and 2016 for Jack and Sam?
Question 2: (25 points): Please answer both parts of the question. Fully explain which curve(s) shift and why.
a) Suppose that the real wealth rises, other things constant. Using the IS/LM model, demonstrate the impact that this would have on equili
ium real income and the interest rate.
To place lines on the graph:
    Click on the Insert Ta
    Click on the Shapes Button
    Select a straight line (by clicking on it)
        This will turn the cursor into cross hairs
    Click and drag on the graph to draw your line
To insert a text box:
    Click on the Insert Ta
    Click on the Text Box Button
        Select Simple Text Box
    Drag the text box to place on graph
Alternatively, you may find it easier to draw the graph in the Powerpoint file (Homework_2_Question_2_template.pptx) and copy/paste into this document.
) Suppose that the real money supply increases, other things constant. Using the IS/LM model, demonstrate the impact that this would have on equili
ium real income and the interest rate.
To place lines on the graph:
    Click on the Insert Ta
    Click on the Shapes Button
    Select a straight line (by clicking on it)
        This will turn the cursor into cross hairs
    Click and drag on the graph to draw your line
To insert a text box:
    Click on the Insert Ta
    Click on the Text Box Button
        Select Simple Text Box
    Drag the text box to place on graph
Alternatively, you may find it easier to draw the graph in the Powerpoint file (Homework_2_Question_2_template.pptx) and copy/paste into this document.
Question 3: (20 points): Use dataZoa to build a table with the following monthly data, which is available at the Federal Reserve Bank of St. Louis FRED website (https:
fred.stlouisfed.org/). Include six months of data in the table. FRED variable names are in parentheses. You can search FRED using these variable names.
· U.S. real personal income, seasonally adjusted annual rate (RPI)
· U.S. real disposable personal income, seasonally adjusted annual rate (DSPIC96)
· U.S. total nonfarm employment, seasonally adjusted (PAYEMS)
· U.S. civilian unemployment rate, seasonally adjusted (UNRATE)
· U.S. civilian employment-population ratio, seasonally adjusted (EMRATIO)
· U.S. CPI-U, all items, all cities, seasonally adjusted (CPIAUCSL)
· U.S. CPI-U all items less food and energy, all cities, seasonally adjusted (CPILFESL)
Show the levels for all series and also include year-to-year growth rates for all series except:
· U.S. civilian unemployment rate, seasonally adjusted
· U.S. civilian employment-population ratio, seasonally adjusted
Using a dZboard, share the link to your table here:
Question 4: (30 points)
Download the data on U.S. total nonfarm employment (monthly, seasonally adjusted) that you used in Question 3 to a spreadsheet file. You can download the data either from dataZoa (in a CSV file which can be opened in Excel) or directly from the FRED website (in an Excel file).
Use the observations from September 2010 to the most recent available month, generate forecasts for total nonfarm employment in (a) the next month after the end of the available data, and (b) 3 months ahead, using two techniques:
a) Take first differences and use the recursive sample average technique (Week 1, Forecast Method 1)
a. Hint: forecast the first difference using the recursive sample average technique, then use that to calculate the forecast employment level
) use a linear trend regression via the TREND function in Excel
How similar are the two types of forecasts in this case? Explain why the two methods lead to similar or different results. Would either of these two methods be appropriate for making forecasts for total nonfarm employment with a forecast horizon of two years (in other words, forecasting two years into the future)? Why or why not? Please remember to also submit the Excel spreadsheet you used to create your forecasts.

        Page 3 of 4Copyright © Arizona Board of Regents
Answered Same Day Nov 27, 2021

Solution

Kushal answered on Dec 01 2021
142 Votes
Question1
                        Compound Annual Percent Change
                2015    2016    2015-2016
            Jack earned in Boston    $40,000    $54,000    35%        40000    54000    0.35
                                57    85    0.4912280702
            Sam earned in Seattle    $57,000    $85,000    49.12%
            CPI-U All Items for Boston    254.556    257.215    1.04%
            CPI-U All Items for Seattle    246.018    249.364    1.36%
            Jack’s real earnings in Boston        53582.1744527727    33.955436131931700%
            Sam's real earnings in Seattle        84223.1640416555    47.76%
            Source -     http:
www.bls.gov/cpi/).
            1    The prices are higher in Boston based on high CPI index
                However, over the year of 2015-16 the inflationwas higher in Seattle as compared to Boston
            2    The real earnigns will decrease due to the positive inflation
                The earnigns shown are the nominal earnigns and we need to subtract the ifnaltion rates from the same
                hence, the real eanings for jack and Sam are respectively, $53,582 and $ 84,223.16
http:
www.bls.gov/cpi
Question 4 - recursive
    FRED Graph Observations
    Federal Reserve Economic Data
    Link: https:
fred.stlouisfed.org
    Help: https:
fred.stlouisfed.org/help-faq
    Economic Research Division
    Federal Reserve Bank of St. Louis
    PAYEMS    All Employees, Total Nonfarm, Thousands of Persons, Monthly, Seasonally Adjusted
    Frequency: Monthly
    observation_date    PAYEMS    First Difference
    2010-09-01    130373
    2010-10-01    130642    269    1        SUMMARY OUTPUT
    2010-11-01    130765    123    2
    2010-12-01    130839    74    3        Regression Statistics
    2011-01-01    130859    20    4        Multiple R    0.0504637908
    2011-02-01    131072    213    5        R Square    0.0025465942
    2011-03-01    131304    232    6        Adjusted R Square    -0.0067754003
    2011-04-01    131625    321    7        Standard E
or    31.7165007649
    2011-05-01    131720    95    8        Observations    109
    2011-06-01    131955    235    9
    2011-07-01    132016    61    10        ANOVA
    2011-08-01    132138    122    11            df    SS    MS    F    Significance F
    2011-09-01    132374    236    12        Regression    1    274.8029778126    274.8029778126    0.2731812589    0.6022862468
    2011-10-01    132578    204    13        Residual    107    107635.197022187    1005.9364207681
    2011-11-01    132710    132    14        Total    108    107910
    2011-12-01    132914    204    15
    2012-01-01    133269    355    16            Coefficients    Standard E
or    t Stat    P-value    Lower 95%    Upper 95%    Lower 95.0%    Upper 95.0%
    2012-02-01    133531    262    17        Intercept    50.9331654584    8.35293476    6.0976371685    0.0000000174    34.374446498    67.4918844188    34.374446498    67.4918844188
    2012-03-01    133769    238    18        X Variable 1    0.0205490898    0.039315802    0.5226674458    0.6022862468    -0.0573899022    0.0984880818    -0.0573899022    0.0984880818
    2012-04-01    133852    83    19
    2012-05-01    133951    99    20
    2012-06-01    134023    72    21
    2012-07-01    134176    153    22        Predicted...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here