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Bureau of Economic Analysis

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Visit: http://www.bea.gov/national/xls/gdpchg.xls
This site is part of the Bureau of Economic Analysis website. Look at the inflation adjusted data and identify the periods of negative real economic growth. What might have caused each of these periods of economic decline?

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The table shown in .xls format is easy to interpret if you have a solid grasp on American history.
We need to use the â??chained dollarâ?? measure because it is more accurate.
It changes the measure of goods that a dollar could buy at any given time. The base year is always 2005.

The first group, in the 1930s, was clearly caused by the Great Depression. Here, you can talk about the "bubble" created by record corporate profits in the 1920s. Continued investment in plant expansion helped create both a bubble and bit of inflation. Constant expansion meant that consumers had to keep up with supply "but this is long before credit cards and even store credit" it could not be done. Overproduction and a severe crisis was the result.

There was a slight decline at the end of the war, which is understandable since millions of soldiers were returning home to find jobs. The wartime economy was over, so there was a decline. This was probably unavoidable.

The late 1950s shows a very slight decline. There was some limited problems with inflation, and, maybe, the costs of the Korean war (1950-1953) hurt the economy for a brief time. The fact is that the 1950s were a great economic time, but some military cutbacks after Korea helped a ...

Solution Summary

The expert examines Bureau of Economic analysis.