1. Economic fluctuations and growth The following table shows data on a hypothetical country's real GDP from 1980 throug

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1. Economic fluctuations and growth
The following table shows data on a hypothetical country's realGDP from 1980 through 1988:
Year
Real GDP
(Billions of dollars)
The grey line on the following graph shows the economy'slong-term growth trend.
Use the blue points (circle symbol) to plot the real GDP in eachof the years listed. Be sure to plot from left to right. Linesegments will automatically connect the points. Next, place thegreen triangle on the graph to indicate the point on the real GDPcurve that definitely represents a peak. Finally, place the purplediamond on the graph to indicate the point on the real GDP curvethat definitely represents a trough.
RealGDPPeakTrough198019811982198319841985198619871988550540530520510500490480470460450REALGDPYEAR
Calculate the percentage change in real GDP in each year, andthen on the following graph use the orange points (square symbol)to plot the percentage change in real GDP you’ve calculated,rounded to the nearest percent. For example, if the percentagechange is 3.0303%, round it to 3.
Hint: The percentage change in real GDP equals the change in GDPfrom the previous year to the current year. For example, thepercentage change for 1981 can be calculated by finding the changein GDP from 1980 to 1981, dividing this change by the level of GDPin 1980, and then multiplying the result by 100%. For each year,plot the percentage change from the year before. For example, plotthe growth rate from 1980 to 1981 using a horizontal coordinate of1981.
Annualchange19811982198319841985198619871988543210-1-2-3-4-5ANNUAL CHANGEIN REAL GDP (Percent)YEAR
This economy experienced a contraction in the years . On the first graph (showing real GDP), thiscontraction is seen as a period in which the level ofreal GDP . On the second graph (showing annualchange in real GDP), this contraction is seen as a period in whichthe growth rate of real GDP .
True or False: This economy was experiencing acontraction in 1988.
False
True