4. Use FRED (https://fred.stlouisfed.org) to generate a chart that shows both real GDP and real potential GDP over time for the US between 1970 and 2020. [Hint: start by searching for something in the search bar; you can click 'edit graph' and then 'add line' to put different data series on the same chart.]

a) For quarter 4 of 2020 what was real GDP and what was real potential GDP, according to this data? Explain what 'potential' means here. According to this data, when is it the case that gaps open up between real GDP and real potential GDP and why?

b) Explain what 'real' means here. If nominal GDP changes but real GDP does not, what has happened? What are some examples of reasons why real GDP might increase in an economy?

c) Real GDP is one conception of how we can measure the size of an economy. Say that economy A has a bigger real GDP than economy B. Do you think it would be accurate to say that economy A was 'doing better' than economy B? In your answer, please make reference to what is or isn't captured in real GDP that you think might be relevant to how 'well' an economy is doing.