The Following Two Graphs Give You a Plot of the United

question 6

Essay

The following two graphs give you a plot of the United States aggregate unemployment
rate for the sample period 1962:I to 1999:IV, and the (log)level of real United States
GDP for the sample period 1962:I to 1995:IV.You want test for stationarity in both
cases.Indicate whether or not you should include a time trend in your Augmented
Dickey-Fuller test and why. United States Unemployment Rate


United States Real GDP (in logarithms)

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Definitions:

Accounts Payable

Short-term liabilities a company owes to its creditors or suppliers, expected to be settled within one year.

Bank Loan

A sum of money borrowed from a bank that needs to be repaid with interest.

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Spontaneous Financing

Financing that arises naturally from the normal operations of a company, such as trade credit that increases automatically with increases in sales.