Go to the St. Louis Federal Reserve FRED database, and find data on real GDP (GDPC1) and the GDP deflator (GDPDEF). Convert the deflator to the inflation rate by setting the Units setting to “Percent Change from Year Ago,” and download the data.

a) Based on data from the last 10 years, identify the period of lowest inflation. Prior to that period (but within the last 10 years), identify the period of highest inflation. What is the total change in the inflation rate over these two periods?

b) Using the dates identified in part (a), calculate the percent change in real GDP over the two periods.

c) Use your answers to parts (a) and (b) to calculate the sacrifice ratio. 

d) From 1981:Q1 to 1982:Q4, GDP fell by 2.1% and inflation decreased by 4.8 percentage points. How does the sacrifice ratio for this prior period compare to your calculations in part (c) for the most recent period?