A policymaker is trying to figure out how much money was lost in the food-away-from-home (FAFH) market

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Question:

A policymaker is trying to figure out how much money was lost in the food-away-from-home (FAFH) market over the first 12 months of the pandemic. They ask, "What is your best estimate for the amount of sales lost in the food-away-from-home market over March 2020 to February 2021?" To do so, follow these steps:

a. Calculate the annual percentage change in FAFH nominal spending for each month between March and February for the years 2018 and 2019 (e.g., you should see that the increase in FAFH nominal spending from November 2018 to November 2019 was about 9.46%).

b. Using these annual month-over-month changes from step (a), predict what sales would have been without the pandemic over March 2020 to February 2021 (e.g., if November 2020 had experienced the previous year's 9.46% increase in sales that you just calculated in the previous step, the total sales volume in November 2020 would have been about $85.84 billion).

c. Finally, take the difference between the observed and predicted nominal spending for each month between March 2020 to February 2021 (e.g., the observed sales volume for November 2020 was about $65.3 billion, or a predicted loss of $20.5 billion). Add up the predicted losses over the twelve-month period from March 2020 to February 2021. This is the number the policymaker wants to see [HINT: it will be larger than the $120 billion proposed late last years by the House in the RESTAURANTS Act, which did not get Senate approval].