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Question

# (a) Plot either receipts and outlays or federal debt and GDP (plot both time series on the same graph).(b) Describe the trend (if any) and discuss possible causes.(c) Fit a trend of your choice to each.(d) Interpret each fitted trend equation, explaining its implications.(e) To whom is this issue relevant? U.S. Federal Finances, 2000–2011 (\$ billions current) Year Receipts Outlays Federal Debt GDP 2000 2,025 1,789 5,629 9,821 2001 1,991 1,863 5,770 10,225 2002 1,853 2,011 6,198 10,544 2003 1,782 2,160 6,760 10,980 2004 1,880 2,293 7,355 11,686 2005 2,154 2,472 7,905 12,446 2006 2,407 2,655 8,451 13,225 2007 2,568 2,729 8,951 13,892 2008 2,524 2,983 9,986 14,394 2009 2,105 3,518 11,876 14,098 2010 2,163 3,456 13,529 14,508 2011 2,174 3,819 15,476 15,080

Solution

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Answered 1 year ago
Answered 1 year ago
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$\textbf{a)}$ By entering data of federal debt and GDP into the appropriate software we get a graph where the horizontal $x$ axis represents the year and the vertical $y$ axis represents the federal finances in billions:

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