Calculate percentage annual growth rates using the data that follow.
(a) Productivity growth measures increase in output per hour of work. Output per hour was 54.0 in the first quarter of 1973, 75.4 in the first quarter of 1996, and 111.0 in the first quarter of 2010(2005 = 100). Calculate the average annual rates of productivity growth between 1973 and 1996 and between 1996 and 2010. Using your answers, explain during which of these two periods living standards rose more quickly.
(b) The GDP deflator was 30.7 in 1974, 43.8 in 1979, 59.8 in 1984, 69.5 in 1989, 79.9 in 1994, 86.8 in 1999, 96.8 in 2004, and 109.6 in 2009. During which five-year interval was the annual inflation rate the highest? During which interval was the average annual inflation rate the lowest? What was the trend in inflation over the last quarter of the twentieth century?
(c) In the second quarter of 2005, real GDP was 12,587.5. In the second quarter of 2006, real GDP was 12,962.5; in the third quarter of 2006, it was 12,965.9. Calculate the percentage annual growth rates between the second quarters of 2005 and 2006, and the second and third quarters of 2006. Interpret your results.