Problem 2. You are given a detrended real GDP, detrended government spending, and

detrended business investment in a quarterly frequency. The data spans from 1961 Quarter

1 to 2022 Quarter 3.

(a) Use Excel to plot the time series of government spending along with the real GDP,

then plot the time series of business investment with the real GDP. Label your graphs

correctly.

(b) Use command STDEV in Excel to calculate the standard deviation of each time series.

Then use command CORREL to calculate the correlation between the GDP and other

series respectively.

(c) Which time series show the most variability relative to GDP?

(d) Scatter plot the GDP and the government spending as well as the GDP and the business

investment. Are these series procyclical, countercyclical or acyclical?

(e) What lead/lag patterns do you detect in the plots?