Consider the following data that identifies real gross domestic product (GDP) in comparison to the long-run trend of real GDP to answer the following questions:

Quarter Real GDP Long-Run Trend of Real GDP

(billions of dollars) (billions of dollars)

1 4,000 4,000

2 4,160 4,120

3 4,326 4,244

4 4,413 4,371

5 4,501 4,502

6 4,591 4,637

7 4,499 4,776

8 4,409 4,919

9 4,673 5,067

10 4,954 5,219

11 5,252 5,376

12 5,376 5,537

In what quarter did this economy enter a recession?

Question

Business

Carina Madden

22 December, 01:12

Consider the following data that identifies real gross domestic product (GDP) in comparison to the long-run trend of real GDP to answer the following questions:

Quarter Real GDP Long-Run Trend of Real GDP

(billions of dollars) (billions of dollars)

1 4,000 4,000

2 4,160 4,120

3 4,326 4,244

4 4,413 4,371

5 4,501 4,502

6 4,591 4,637

7 4,499 4,776

8 4,409 4,919

9 4,673 5,067

10 4,954 5,219

11 5,252 5,376

12 5,376 5,537

In what quarter did this economy enter a recession?

+4

Answers (1)

Know the Answer?

Larry Pittman · Answer 1

Between quarter 7 and 8

Explanation:

To calculate the recession lets consider the quarter 7 and 8.

GDP in quarter 7 = $4499 Billion

GDP in quarter 8 = $4409 Billion

Growth rate of GDP in these two quarters = 4409-4499/4499*100

= - 2 percent

Recession happens when the GDP decreases