Go to the St. Louis Federal Reserve FRED database, and find data on real GDP (GDPC1), potential GDP (GDPPOT), and the unemployment rate (UNRATE) from 1960 to the most recent period. For the unemployment rate data, convert the frequency to Quarterly. Download all of the data into a spreadsheet, and calculate the output gap and aggregate output index for each quarter.

a. In which quarter is the output gap the most negative? What is the Aggregate Output Index for that quarter? 

b. In which quarter is the unemployment rate highest?

c. Are these periods of time close to each other? What does this tell you about the relationship between output gaps and the unemployment rate?