3 In this question we are going to address whether the Fed and Alan Greenspan kept interest rates too low for too long following the 2001 recession according to two rules: The original Taylor Rule and the Mankiw Rule

Use the table below to answer the following questions.

FF - the federal funds rate

PCE INF = PCE inflation

PCE CORE = the core rate of PCE inflation

GDP = real GDP

GDP POT = potential (real) GDP

UR = the unemployment rate

Data Table for Question 3- DATES FF+ PCE PCE INFO CORE GDP GDP POT- UR 2004-04 01- 1.01. 2.5 1.9 13710.7 13833.5 5.6 2004-07- 1.43 2.5 2.0 13831.0 13916.8 5.4 2004-10- 01+ 1.95 2.9 2.1 13947.74 13999.2 5.4 2005-01- 01- 2.47 2.6 2.2 14100.2 14082.6 5.3 2005-04- 01+ 2.94 2.6 2.1 14177.2 14165.8 5.1 2005-07- 01+ 3.46 3.1 2.1 14292.9 14249.3 5.0 2005-10- 01+ 3.98 3.1 2.3 14372.0 14333.2 5.0 2006-01- 01- 4.46 3.0 2.1. 14546.4 14418.5 4.7. 2006-04- 01- 4.91 3.1 2.3 14591.6 14504.9 4.6 2006-07- 01- 5.25 2.8 2.4 14604.4 14592.0 4.6 2006-10- 01+ 5.25 1.8 2.2 14718.4 14679.8 4.4 2007-01- 01- 5.26 2.3 2.4 14728.1 14768.3 4.5 2007-04- 01+ 5.25 2.3 2.0 14841.5 14859.1 4.5