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Investment Instability

The Bureau of Economic Analysis provided data for real private nonresidential fixed investment in table form at www.bea.gov. Access the BEA interactively and select National Income and Product Account Tables. Find Table 5.4 "Private Fixed Investment by Type." Has recent real private nonresidential fixed investment been volatile (as measured by percentage change from previous quarters)? Which is the largest component of this type of investment, (1) structures or (2) equipment and software? Which of these two components has been more volatile? How do recent quarterly percentage changes compare with the previous years' changes? Looking at the investment data, what investment forecast would you make for the forthcoming year?

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Investment Instability--Changes in real private nonresidential fixed investment
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<br> Has recent real private nonresidential fixed investment been volatile (as measured by percentage change from previous quarters)?
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<br>Yes, real private nonresidential fixed investment, as measured as a percentage change from the preceding quarter, has increased only by 5.8% in 2004 Quarter 1, whereas it increased by 10.9% in 2003 Quarter 4 and by 12.8% in 2003 Quarter 3.
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Solution Summary

Changes in real private nonresidential fixed investment are demonstrated.

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