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Describe the trends in the graph over time. With reference to economic theory explain the reasons for the behaviour you observe for the two series. Comment specifically on the recession periods

Semester 2

Coursework

 

Module:

Business Economics

Module Code:

BBS_4_ECO


Part C – Macroeconomy

5. Download annual US data on consumption (real personal consumption) and GDP (real gross domestic product) from 1995 until 2018 from FRED and include both in the same graph. Overlay recession bars and copy the graph into your Word document. 
a) Describe the trends in the graph over time. With reference to economic theory explain the reasons for the behaviour you observe for the two series. Comment specifically on the recession periods.
b) What is the connection between consumption and GDP? Explain from a theoretical economic point of view.
c) How does the increase in GDP and consumption benefit Spotify and Adidas? Please refer to both firms’ growth and investment opportunities.

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