Economics Time Series

Each of the two graphs below shows gross domestic product (GDP) per capita. The lefthand graph shows the value in dollars from the year of measurement. The righthand graph shows the same thing but using dollars converted to their value in the year 2000.

Questions

  1. Describe the differences between the two graphs and explain how these differences come about.
  2. Which graph is more informative; i.e. which graph is easier to use to think about what was happening to the economy? Explain why that is.
  3. There are many interesting small features to the righthand graph. Describe at least two of them in terms of what they show about the economy at that time.
  4. On average, how much did per capita GDP in constant dollars increase per year during the time period shown? (Tip: In the graph's Gear menu, choose Show Movable Line.)

Try This

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Questions

  1. Why isn't the plot of disposable income versus GDP per capita (in Year 2000 dollars) a perfect straight line?
  2. Services per capita shows subtle differences from other series. Describe and explain.