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From that perspective, they can then also be assumed that nonresidential fixed investment may also continue to go down. This is based on the qualitative relationship the two variables have with one another.
Question 3A & B
The last two quarters saw a decrease in nonresidential fixed investments. In fact, the rate dropped to about 3%, on average (Mataloni, 2013). This comes as a reaction to the recent increase seen in government spending over more recent quarters, compared to the last couple years average rates. There is a clear relationship between levels of nonresidential investments and levels of government spending. In fact, the research suggests that "nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local spending" (Mataloni, 2013).The higher the levels of government spending essentially means a clear decrease for nonresidential fixed investment levels, according to the principles under the production possibilities curve. Yet, at the same time when there are dips in nonresidential fixed investment, federal spending has to increase and pick up the slack to meet budget demands. As such, federal spending increases when levels of nonresidential fixed investment get to low. Thus, with the decrease of 3% in rates of nonresidential fixed investments, it could be assumed using the statistics that the level of federal spending has increased as a side effect as well (Mataloni, 2013).
References
US Department of Commerce. (2013). National Income and Product Accounts Table. Bureau of Economic Analysis. Web. http://www.bea.gov/iTable/iTable.cfm?reqid=9&step=1&acrdn=2#reqid=9&step=1&isuri=1
Heritage Foundation's Index of Economic Freedom. (2013). Country rankings. 2013 Index of Economic Freedom. Web. http://www.heritage.org/index/ranking
Heritage Foundation's Index of Economic Freedom. (2013). United States. 2013 Index of Economic Freedom. Web. http://www.heritage.org/index/country/unitedstates
Mataloni, Lisa a. (2013). National income and products accounts: Gross domestic product, first quarter 2013. Bureau of Economic Analysis. Web, http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Trading Economics. (2012). Benin Unemployment Rate. Web. http://www.tradingeconomics.com/benin/unemployment-rate
US Government Spending. (2013). Government Spending Totals. Web. http://www.usgovernmentspending.com/total
Production Possibility Curve
Product Possibility Curve
Productivity Possibility Curve
Chart6
250000
272500
300000
322500
Government Spending
Consumer Goods
Production Possibilities...
Dollars) Consumer Goods Year
6.2 110.297 2013
5.97-115.79 2012
6.1 108.822 2011
5.9 104.852 2010
6 103.105 2009
6.5 135
6.4 130
6.3 125
6.2 120
6.1 115
6 110
5.9 105
5.8 100
5.7 95
5.6 90
5.5 85
5 80
Government Spending Consumer Goods Year
93.1 260000 2009 85 250000
93.7 275000 2010 90 272500
89.6 290000 2011 95 300000
91 310000 2012 100 322500
88 327000 2013
Government Spending Consumer Goods Year
35.1 96000 2009
35.4 103000 2010
44.8 109000 2011
41 111000 2012
39.3 114000 2013
Sheet1
Government Output (in Trillions)
Consumer Goods Spenging
Sheet2
Government Spending
Consumer Goods
Production Possibilities Curve
Sheet3
Chart7
250000
272500
300000
322500
Government Spending
Consumer Goods
Production Possibilities Curve
Sheet1
Government Output (in Trillions od U.S. Dollars) Consumer Goods Year
6.2 110.297 2013
5.97-115.79 2012
6.1 108.822 2011
5.9 104.852 2010
6 103.105 2009
6.5 135
6.4 130
6.3 125
6.2 120
6.1 115
6 110
5.9 105
5.8 100
5.7 95
5.6 90
5.5 85
5 80
Government Spending Consumer Goods Year
93.1 260000 2009 85 250000
93.7 275000 2010 90 272500
89.6 290000 2011 95 300000
91 310000 2012 100 322500
88 327000 2013
Government Spending Consumer Goods Year
35.1 96000 2009 25 95000
35.4 103000 2010 30 100000
44.8 109000 2011 35 105000
41 111000 2012 40 110000
39.3 114000 2013 45 115000
Sheet1
Government Output (in Trillions)
Consumer Goods Spenging
Sheet2
Government Spending
Consumer Goods
Production Possibilities Curve
Sheet3
Chart4
95
90
85
80
Government Output (in Trillions)
Consumer Goods Spenging
Sheet1
Government Output (in Trillions od U.S. Dollars)…
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