Output, Unemployment, and Inflation
Explore: What has been the United States experience with output, unemployment and inflation over the past 100+ years?

Macroeconomics is the study of the performance of the national economy and government policies designed to improve that performance. This exercise illustrates three key statistics--output, unemployment, and inflation and introduce some terminology for describing data.

This interactive graph familiarizes you with three key statistics: output, unemployment, and inflation and explores ways to describe the movement of data. By pressing Show Recessions, the graph will show expansions and recessions. It’s important to know the dates of business cycles to see if the data behave predictably in recessions and on expansions. Pro-cyclical data rise with expansions and fall with recessions. Countercyclical data behave in the opposite manner--falling with expansions and rising with recessions. Some data also move up or down long periods of time. These exhibit a trend. Trends and the movement of a data series over a business cycle are two ways of describing data.

To begin using this graph, click on the check-boxes or variable name of the data that you want to graph (up to two variables at a time), enter the starting and ending dates, and click on the Plot Data button to plot the data series. The color of the line in the graph matches the color of the variable name. Click on the Show Recessions button to show periods of recession (shaded). Click the Reset button to clear the graph and start over.

1. Press the Show Recessions button to reveal economic expansions and recessions. What do you notice about the length of economic expansions (gray) relative to economic recessions (brown)? How many recessions have occurred since you have been born?
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2. Reset the graph. Show economic expansions and recessions on the graph by pressing the Show Recessions button. Graph Output (Real GDP) from 1960 to 2004. What happens to output during recessions?
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3. Reset the graph. Show economic expansions and recessions on the graph by pressing the Show Recessions button. Graph the Unemployment Rate from 1960 to 2004. What happens to unemployment during recessions?
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4. Reset the graph. Show economic expansions and recessions on the graph by using the Show Recessions button. Graph the Inflation Rate from 1960 to 2004. What happens to the inflation rate during recessions?
   See answer here