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    Measures and Indicators: GDP, national income, unemployment, inflation

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    Examine the most recent issue of International Economic Trends, published by the Federal Reserve Bank of St. Louis. You will notice percent changes in economic data for seven countries and the Euro Area. We need to compare indicators for the United States to those of other countries and form a view about the future.

    International Economic Trends is found at this site:


    Please address the following questions.

    1. Compare the United States, Japan, the Euro Area and Canada in terms of production and employment in the most recent quarter and a year ago.

    2. Rank the four countries with respect to inflation. How does the United States compare to the three other countries/areas now versus in 2006?

    3. What is the unemployment rate in each country in the most recent quarter?

    4. After reviewing the recent economic indicators for these countries, assess the strength of each economy at the present time.

    5. What is your prediction about the economic health of each economy over the next few years?

    Please note:

    - The headings for the columns represent years and quarters; for example 07.2 is the second quarter of 2007.

    - If there are blanks for countries then use the previous quarter for which data are available for the four countries.

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    Solution Preview

    Before answering the question I would like to mention that the source mentioned above provides a set of graphs and not actual numbers. Hence, the values provided here are estimates from the graph. The complete report can be found at


    1. In the latest quarter real GDP fall was lowest in Canada, closely followed by the US at about 2%. Japan experienced a fall of 4%, while the Euro area experienced a fall of 4.5%. An year ago US was the fastest growing economy at about 2% while Japan and Canada were languishing below 1%. The Euro area was still strong growing at slightly above 2%.

    Employment was changing the slowest in Japan, falling at less than 1%, closely followed by Canada and the Euro area. US was experiencing the highest rate of employment loss at about ...