This is a report which is split into 4 parts using Excel & Word. The max word count is 1500 with roughly 1 reference for every 100 words, it does not need to be exactly 1500 words nor 15 references. It needs to be 12-point font Times New Roman and single spaced.
Question 1 (25 marks)
Using the Federal Reserve of St. Louis database(), build a single graph plotting four indicators for the U.S. between 2000 and 2021, representing the following aspects:
(i) Economic growth;
(ii) Change in investment;
(iii) The cost of borrowing. Here, you want to use two different indicators, representing respectively:
a. The cost of borrowing for firms via the bond market;
b. The cost of borrowing targeted by the central bank (or “policy rate”).
Extract the data as an Excel spreadsheet, so that you can use the exact figures in your answers below. The Excel file should be attached to your final submission. Include the correct reference to these datasets at the end of the main text.
Question 2 (25 marks)
Describe the indicators on your graph, and justify why the indicators that you have chosen are appropriate for capturing the four economic aspects under investigation.
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Question 3 (25 marks)
Describe the data.
i) Describe the relationships that you observe:
– Between economic growth and change in investment;
– Between investment and cost of borrowing. ii) Describe the long run trend:
– For the cost of borrowing for firms from the bond markets
Question 4 (25 marks)
Interpret (explain) the two relations described above, using any relevant theory or model: that is, use economic theory to explain why we see the data behaving in the way that it does. Explain the significance of the long-run trend identified in the data by explaining how it might not be what we expect from the theories yet covered.
You can use any “language” to answer the question: English,equations, diagrams, or a mixture of the three. You will however score more marks for making use of equations and diagrams where appropriate.
