Figure 17.5: Investment-Output Ratio 2005-2012

question 59

Essay

Figure 17.5: Investment-Output Ratio 2005-2012
(Source: Federal Reserve Economic Data, St. Louis Federal Reserve)
-Figure 17.5 shows the quarterly investment-output ratio (I_t/Y_t) for 2005-2012. Use the discussion on desired capital to investment, and what you know about the Great Recession, to motivate a discussion about the decline in investment that began in the mid-2000s.

---

Definitions:

Equal Distribution

The concept of distributing resources or wealth evenly across a society or group, aiming for fairness and equity.

Income

The financial gain received by an individual or a business as a return for labor, investment, or the production of goods/services.

Poverty Rate

The proportion of a population living below the poverty line, indicating the percentage of people whose income falls beneath a certain threshold necessary for basic living standards.

Absolute Level

A term that refers to the value of a measure in terms of its actual magnitude, without comparison to other measures or points in time.