DRAFT ANALYSIS OF MACROECONOMIC DATA

Overview: Professionals working in areas of finance and economics combine understanding of the business and management issues related to the real-world activities of public and private entities worldwide, with a sound knowledge of macroeconomic theory and policy tools and technical skills. They are frequently asked to interpret data to draw research-based conclusions regarding activities of the firms they manage, in relation to broader macroeconomic phenomena.

In your final project, you will develop the ability to understand how economy-wide or regional economic forces affect decisions of senior business management officials in the private sector.

Use Amazon.com as the US company for this term paper

Prompt:
For Milestone Two of your final project, you will analyze macroeconomic data including fiscal and monetary actions taken by U.S. authorities, GDP, and the Consumer Price Index. Using research on annual percentage changes in GDP, you will be required to compute a trend in order to assess variation and describe patterns in business cycle fluctuations.
You will use Federal Reserve Economic Data (FRED) to determine the natural and current rate of unemployment and to characterize the relationship between actual and potential output.
You will then use your research on macroeconomic data to illustrate current macroeconomic risk factors and their significance to your chosen firm (Amazon.com).
Milestone Two concludes with a theoretical description and evaluation of each of the policy actions discussed.

Specifically, the following critical elements must be addressed:

Look at the sample essay as a guide that was uploaded!

II. Analysis of Macroeconomic Data
a. Document recent fiscal and monetary actions taken by U.S. authorities addressing business cycle phenomena.
b. Calculate annual percentage changes in GDP and the Consumer Price Index (CPI-U) in the United States from 1948 to the current year.
c. Partition your data into the periods of 1948–1972, and from 1973 to the most recent year available. Plot annual percentage changes in GDP for these two periods. Compute a trend and assess variation, and describe patterns that you discern in relation to what you know about business cycle fluctuations.
d. Consult FRED (Federal Reserve Economic Data) to determine what has been identified to be the natural rate of unemployment and the current rate of unemployment in the current period. Using the FRED data, characterize the current relationship between actual and potential output (Okun’s law may be used to guide your assessment).
e. In light of what you identify to be the current relationship between actual and potential output, and the policy actions documented in “step a” above, graphically or mathematically illustrate the current macroeconomic risk factors and explain why this result is of significance to the firm that you are considering.
f. Describe the theoretical basis of each documented policy action that you have assembled and, using data collected here, evaluate its effectiveness.
• Did the policy achieve its intended economic outcomes? If so, what indicates that it was successful? If it was not successful, why did it fall short? Use examples to illustrate your point and back up your argument with research.

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