Purpose
The project is designed to ensure that students are familiar with the methodology of collecting and analyzing data from the websites. Each part of the project includes collecting the required data, creating a graph or table to present this information, and writing three to four double-spaced data analysis pages. Students should aim to provide clear insights and interpretations rather than merely presenting data.
To evaluate your ability to analyze economic data related to GDP, its components, and economic growth in the United States using both the expenditure and income approaches, and to interpret the significance of this data in the context of current economic events.
Project Requirements
- Textbook and Learning Resources as a Reference: Students must use the assigned textbook, as well as chapters from “Concepts and Methods of the U.S. National Income and Product Accounts”, and “Measuring the Economy: A Primer on GDP and the National Income and Product Accounts”, provided in Content > Unit 1 as a primary reference for their analysis. This ensures a strong theoretical foundation and context for the data being analyzed.
- Current Data and References: All data used must be the most recent available data. Students must include references from recent news articles, journals, or other credible sources to support their analysis. This requirement aligns with the expectation to use up-to-date Bureau of Labor Statistics (BLS) or Bureau of Economic Analysis (BEA) data.
- Focus on Analysis –While charts and graphs are necessary to present data visually, the focus should be on explaining the significance of the data.
- Elimination of First-Person Language: Students must avoid using the first person in their papers. Instead, reflections and analyses should be restated in the third person. This enhances objectivity and professionalism in academic writing.
Associated Skills
- Data collection and analysis
- Economic model application
- Critical thinking and interpretation of economic indicators
- Professional business writing and reporting
Instructions
Evidence Statements
This project requires you to demonstrate your understanding of GDP calculation methods, economic indicators, and their significance in the current economic landscape. You will collect data from authoritative government sources, perform calculations, create visual representations, and analyze the results in a comprehensive report.
The project consists of two parts, both due at the end of week 3:
Part 1: Expenditures Approach to Calculating GDP (43% of assignment grade)
Data Collection and Presentation (19% of project grade)
1. Visit the Bureau of Economic Analysis website at www.bea.gov
2. From the drop-down menu under “Data”, click on “by Economics Account”
3. Click on “National” > “Gross Domestic Product” > “Full Release and Tables”
4. Locate Table 3 (Gross Domestic Product: Level and Change from Preceding Period) by scrolling down to the “Current Release” section.
5. You will be using the information from both parts of table 3- (nominal GDP (and its components) in billion of dollars from left columns and real GDP (in billions of chained 2017 dollars) from the right part of table 3). Omit the intermediate lines found in Table 3 on the website.
Create a table containing the most recent available data for both nominal GDP (in billions of dollars) and real GDP (in billions of chained 2017 dollars) for the following components:
- Gross domestic product
- Personal consumption expenditures
- Gross private domestic investment
- Net exports of goods and services
- Government consumption expenditures and gross investment
Please note that you should use the most recent available data. Using the data for previous years and/or previous estimates will produce grade zero for this part of the project.
IMPORTANT! GDP for each quarter is not 1⁄4 of the annual GDP. GDP for each quarter is an annual estimate based on the results of each quarter.
“BEA estimates the nation’s GDP for each year and each quarter. But new GDP statistics are released every month. Why? Because for each quarter, BEA estimates GDP three times. The advance estimate, coming about a month after the quarter’s end, is an early look based on the best information available at that time. The second estimate and third estimate each incorporate additional source data that weren’t available the month before, improving accuracy.” (Bureau of Economic Analysis)
6. Calculate the percentage (proportion) of each category in both nominal GDP and real GDP using the following formulas:
Using Nominal GDP:
- [Personal consumption expenditures / Nominal GDP] × 100%
- [Gross private domestic investment / Nominal GDP] × 100%
- [Government consumption expenditures and gross investment / Nominal GDP] × 100%
- [Net exports of goods and services / Nominal GDP] × 100%
Using Real GDP:
- [Personal consumption expenditures / Real GDP] × 100%
- [Gross private domestic investment / Real GDP] × 100%
- [Government consumption expenditures and gross investment / Real GDP] × 100%
- [Net exports of goods and services / Real GDP] × 100%
7. Present the data and calculation results in a well-organized table in your project
Analysis Report (24% of project grade)
Write a 3-4 page (double-spaced) report analyzing the results. Your analysis should address the following questions:
1. Why was the nominal GDP greater than the real GDP? By how much?
2. Which category makes up the largest portion of GDP? Which makes up the smallest portion?
3. What is “Gross private domestic investment”? What does it measure?
4. Analyze the significance of the data and calculation results regarding nominal and real GDP and its categories. How do current economic events affect the size of real GDP in the United States? Include references from recent news articles, journals, or other credible sources.
5. What is “Net exports of goods and services”? Why is it negative?
6. In the left part of table 3 (nominal GDP), find the category “National defense.” How much was allocated to National defense using the most recent available data? Calculate the percentage of National defense out of “Government consumption expenditures and gross investment”. Calculate the percentage of National defense out of GDP.
7. Analyze the significance of the data and calculation results regarding net exports of goods and services and national defense. How do current economic events affect these components in the United States? Include references from recent news articles, journals, or other credible sources.
8. Find a news article published within the last month that discusses GDP short-term and long-term economic growth in the United States. If the forecast in the news article is correct, what size of GDP and/or its components are expected in the short term and long term? The article should be from an online newspaper or magazine. Materials posted on educational websites, such as (The Balance Money, Khan Academy) , and so on, are not considered news articles even if they were recently updated and contain material related to this question.
9. Write a reflection paragraph about what you learned from this assignment and how you could apply this knowledge in the workplace and/or everyday life.
Part 2: Income Approach to Calculating GDP (43% of assignment grade)
Data Collection and Presentation (19% of project grade)
1. Visit the Bureau of Economic Analysis website at www.bea.gov
2. From the drop-down menu under “Data”, click on “by Economics Account”
3. Click on “National” > “Gross Domestic Product” > “Full Release and Tables”
4. Use Table 7 (Relation of Gross Domestic Product, Gross National Product, and National Income) and Table 8 (Personal Income and its Disposition)
5. Create a table containing the most recent available data for:
- Gross domestic product
- Gross national product
- Net national product (calculate as Gross national product minus Consumption of fixed capital)
- National income
- Personal income
- Personal Disposable Income
- Personal Savings
Please note that using the data for previous years and/or previous estimates will produce grade zero for this part of the project. Omit the intermediate lines found in Tables 7 and 8 on the web site.
Analysis Report (24% of project grade)
Write a 3-4 page (double-spaced) report analyzing the results. Your analysis should address the following questions:
1. What is the difference between gross domestic product (GDP) and gross national product (GNP)? What is the difference in what GDP measures compared to GNP? Based on the table, what calculations must you make to determine GNP from GDP?
2. Analyze the significance of GNP data. How do current economic events affect the size of GNP in the United States? Include references from recent news articles, journals, or other credible sources.
3. What is national income (NI)? What does NI measure? Which was higher this year, GNP or NI? By how much? What calculations must you make to determine NI from GNP?
4. What category makes up the largest portion of NI?
5. Analyze the significance of the National Income data and its categories. How do current economic events affect the size of national income in the United States? Include references from recent news articles, journals, or other credible sources.
6. Find a news article published within the last month that discusses National Income short-term and long-term economic growth in the United States. If the forecast is correct, what size of National Income is expected in the short term and long term?
7. What calculations must you make to determine Personal Income from National Income?
8. What calculations must you make to determine Personal Disposable Income and Personal Savings?
9. Analyze the significance of the data for Personal Income, Personal Disposable Income, and Personal Savings. How do current economic events affect the size of personal income in the United States? Include references from recent news articles, journals, or other credible sources.
10. Write a reflection paragraph about what you learned from this assignment and how you could apply this knowledge in the workplace and/or everyday life.
Skill Integration (5% of Assignment Grade)
This project is designed to develop and assess your ability to apply a variety of essential skills used in economic analysis. Your work will be evaluated not only on the accuracy of your data and the strength of your analysis, but also on how skillfully you demonstrate the following capabilities:
- Economic Analysis
- Decision Support in Macroeconomics
Please note that the article should be from an online newspaper or magazine. Materials posted on educational websites, such as (The Balance Money, Khan Academy), and so on, are not considered news articles even if they were recently updated and contain material related to this question.
Deliverables
Submit the following:
1. A comprehensive report containing:
- Title page with your name, course number, and project title
- Introduction explaining the purpose and scope of the project
- Part 1: Expenditures Approach to Calculating GDP
- Data tables with calculations
- Analysis report addressing all required questions
- Part 2: Income Approach to Calculating GDP
- Data tables with calculations
- Analysis report addressing all required questions
- References page with all sources cited in the text
2. Excel file(s) containing your data and calculations (If using Excel to calculate or create charts)
Submission Guidelines / Criteria for Success
Format Requirements
- Must be typed, double-spaced, in 12-point Times New Roman or Arial font, with one-inch margins
- Must have professional/business style title page
- Must have appropriate in-text citations and professional/business style reference list
- Must be prepared using word processing software (Microsoft Word preferred)
- If using Excel to calculate or create charts, submit the Excel file to support your calculations
- Attachments are limited to a maximum of two files in doc, docx, xls, xlsx, or rtf formats
- No more than 20% of the text should be made up of quotes
PRESENTATION OF THE PROJECT (9%) of the project grade):
- Organization, format, and presentation of paper including professional/business style of the title page, introduction, body, and summary. Begin each section with a subheading; use the subheadings described in the assignment.
- Use of tables, figures, and other graphics to summarize and support analysis presented in the paper. All tables and charts should have the numbering system: “Table 1”, a substantive title, and a reference to the source of the information.
- Use of the assigned textbook and learning resources provided in the course as a primary reference for the analysis, recent news articles, journals, or other credible sources, appropriate in-text citations and professional/business style of the reference list.
Important Notes
- GDP for each quarter is not 1⁄4 of the annual GDP. GDP for each quarter is an annual estimate based on the results of each quarter.
- Hand-written and scanned works, PDF files, JPG files, and files posted in Google Drive will not be accepted or graded.
- The UMGC is seeking professional/business style communications with appropriate citations/references. APA 7th edition is suggested as a guide.