Fall 2022
ECON 6620: National Income Analysis
Assignment 1
August 31, 2022
Part A - Empirical Exercises
Question 1 [5 Points ] The macroeconomics of your favorite country: Pick a country that you find interesting, and learn some basic facts about its economy. Summarize
these facts in a half-page essay. You may find the following resources to be helpful; feel
free to explore others on your own.
—The CIA World Factbook: www.cia.gov/cia/publications/factbook
—Wikipedia: wikipedia.org
—The “Country Snapshots” file, snapshots.pdf, which should be available on your
course web page or from the web address in the next question.
Question 2 [5 Points ] Country snapshots: Download the file snapshots.pdf from web.
stanford.edu/~chadj/snapshots.html and answer the following. (please use the latest year available in the Country Snapshots file whenever the year 2017 appears in the
questions below.)
(a) What was the ratio of per capita income in each of the following countries to that
in the United States in the year 2017: Ethiopia, Mexico, India, and Japan?
(b) Which country had the faster average annual growth rate of per capita GDP between 1960 and 2017, Botswana or China?
(c) Rank these countries in order of population: Bangladesh, Brazil, Indonesia, Nigeria,
Russia, and the United States.
(d) Which is larger as a share of GDP in most rich countries, investment or government
purchases? What about in most poor countries?
(e) Exchange rates are reported as units of domestic currency (like the Japanese yen
or the British pound) per U.S. dollar. Look at the exchange rate for several countries.
Do you detect any overall pattern? Why might that be?
Question 3 [5 Points ] Real versus nominal GDP (a FRED question): Using the
FRED database, locate the data on real and nominal GDP for the U.S. economy. You
may notice that there are both annual and quarterly data (i.e., measures of production
every 3 months) available. For the purpose of this question, let’s stick with the annual
data. Te easy way to find this is to type annual nominal GDP” and “annual real GDP”
into the FRED search box. (For an introduction to FRED, see the case study “The
FRED Database” earlier in this chapter on page 34.)
(a) What is the value of real GDP and nominal GDP for the most recent year available?
Explain why these numbers are different.
(b) What was the value of real GDP and nominal GDP in 1970?
(c) By what factor (e.g., a number like 2.0 if it doubled) did real GDP increase between
1970 and the most recent year? What about nominal GDP?
(d) What explains the difference between the two numbers in part (c)?
Question 4 [5 Points ] The employment-population ratio for men and women (a
FRED question): Using the FRED database, download graphs of the U.S. employmentpopulation ratio for men and women. (For help with FRED, see the case study “The
FRED Database” in Chapter 2 on page 34.)
(a) Display the graphs.
(b) What are some possible explanations for the different trends in the two series between 1950 and 2000?
(c) What might explain the change in the trend for women since 2000?
Question 5 [5 Points ] Inflation in China and India (a FRED question): Using the
FRED database, download a graph of the inflation rate for China and India. (For help
with using the FRED data, see Case Study “The FRED Database” Chapter 2 on page
34.)
(a) Display the two graphs.
(b) What is the average inflation rate in each country for the most recent 5 years of
data? Which country had lower inflation?
Question 6 [5 Points ] Inflation and interest rates in Italy (a FRED question):
Using the FRED database, create a single graph containing the 10-year government
bond yield (one measure of a nominal interest rate) and the inflation rate for Italy.
You may find it helpful to use the search terms “government bond yield Italy” and
“inflation Italy” to locate these series. Also, FRED allows you to add a second series
to the graph of your first series using the “Add Data Series” option.
(a) Display the graph for the years since 1991.
(b) Why do these two series tend to move together over time?
(c) What economic concept corresponds to the difference between these two series?
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