Part 1-Document recent fiscal and monetary actions taken by U.S. authorities addressing business cycle phenomena.
Part 2-Calculate annual percentage changes in GDP and the Consumer Price Index (CPI-U) in the United States from 1948 to the current year.
Part 3-Partition your data into the periods of 1948–1972, and from 1973 to the most recent year available. Plot annual percentage changes in GDP for these two periods. Compute a trend and assess variation, and describe patterns that you discern in relation to what you know about business cycle fluctuations.
Part 4-Consult FRED (Federal Reserve Economic Data) to determine what has been identified to be the natural rate of unemployment and the current rate of unemployment in the current period. Using the FRED data, characterize the current relationship between actual and potential output (Okun’s law may be used to guide your assessment).
Part 5-In light of what you identify to be the current relationship between actual and potential output, and the policy actions documented in “step a” above, graphically or mathematically illustrate the current macroeconomic risk factors and explain why this result is of significance to the firm that you are considering.
Part 6-Describe the theoretical basis of each documented policy action that you have assembled and, using data collected here, evaluate its effectiveness. Did the policy achieve its intended economic outcomes? If so, what indicates that it was successful? If it was not successful, why did it fall short? Use examples to illustrate your point and back up your argument with research.
