We frequently use FRED to produce graphs of data related to macroeconomic variables. We also can use FRED to retrieve the data behind the graphs.

To begin, go to FRED at https://fred.stlouisfed.org/

In the search bar type Real Gross Domestic Product. Click Real Gross Domestic Product from the list to create the graph (and retrieve the data).

In the upper-right corner, click the red Edit Graph button, then click Add Line. In the search bar, type Real Potential Gross Domestic Product. Click the title of the data series, then click Add Data Series. Close the edit box.

You want to examine a short range of the data. To make this easier, use the date drop-down boxes to change the dates of the data series to October 2017 to the present.

In the upper-right corner, click the blue Download Data button, then Excel(data).

The Excel spreadsheet that opens contains the data used to create the graph! The column labeled GDPC1 is real gross domestic product, and the column labeled GDPPOT is real potential GDP.

Do you recall the definition of the GDP gap?

GDP gap = Actual RGDP - Potential RGDP

1. (2 points) In what quarters is the GDP gap positive? (Note: The identifiers in the first column indicate months rather than quarters. You may choose to report the first month of the quarter. For reference, January (1) indicates the first quarter (QI), April (4) indicates the second quarter (Q2), July (7) indicates the third quarter (Q3), and October (10) indicates the fourth quarter (Q4). I agree, they make this more confusing than it needs to be.)
2. (2 points) In what quarters is the GDP gap negative?
3. (2 point) In what quarter was the gap most positive?
4. (4 points) Use the information in this graph to estimate the cost of the pandemic. Think opportunity cost. What is your estimate of the cost? How did you calculate your estimate? This response requires an explanatory paragraph as well as a numeric estimate based on the data retrieved from FRED.