Homework SourseA countrys annual growth rates over a 10year period are show
A country’s annual growth rates over a 10-year period are shown in the following table.
What was the country’s trend rate of growth over this period?
Instruction: Round your answer to one decimal place.
The trend rate of growth = ____ percent
Which set of years most clearly demonstrates an expansionary phase of the business cycle?
Years____ through ____
Which set of years best illustrates a recessionary phase of the business cycle?
Years ____ through _____
| Year | Growth Rate |
| 1 | 5 |
| 2 | 3 |
| 3 | 4 |
| 4 | -3 |
| 5 | -4 |
| 6 | 3 |
| 7 | 4 |
| 8 | 5 |
| 9 | 6 |
| 10 | 2 |
Solution
1) The trend rate of growth equals the average for the 10 year period.
It is equal to (5+3+4-3-4+3+4+5+6+2)/10 = 2.5%
2)The set of years which clearly demonstrates an expansionary phase of the business cycle is-
Years 6 through 9
Because the rate of growth is positive and increasing over the time period.
3) The set of years which best illustrates the recessionary phase of the business cycle is-
Years 4 through 5
Because the rate of growth is negative for the time period.
