1. Go tohttp://research.stlouisfed.org/publications/ and go to Economic Synopses. Find the 2018 No. 25 publication, "Measuring Potential Output". The article loads as HTML text but you can download the PDF at the top-right of the page.

a. What is the Fed's "dual mandate"? How does it try to achieve its mandate?

b. What is the output gap? What is the stabilization policy objective for the output gap? (Note: The term "stabilization policy" as used in the article is the same as "countercyclical policy" as we used in class.)

c. Is potential output an observed variable? How can it be measured? According to the article conclusions, is it likely that monetary policy would be sensitive to different measurement methods?