Question: 1. An economic variable is persistent if declines in the variable tend to be followed by more declines, and increases by more increases. This question

1. An economic variable is persistent if declines in the variable tend to be followed by more declines, and increases by more increases. This question asks you to study the persistence of the civilian unemployment rate. Using data since 1961, identify all quarters in which the unemployment rate (in the last month of the quarter) changed by at least 0.2 percentage points from the previous quarter (either up or down). How many of these changes by 0.2 percentage points or more were followed in the subsequent quarter by (1) another change in the same direction, (2) a change in the opposite direction, or (3) no change? Based on your count, would you say that the unemployment rate is a persistent variable?

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