1. A method for determining functional residual capacity (FRC) of the lungs of a subject, the subject having sequential breaths, each with an inhalation and an exhalation, said method comprising the steps of: providing breathing gas or gases to the subject, the breathing gas or gases flowing into the lungs of the subject during inhalations, exhalation gases flowing from the subject during exhalations; delivering a given amount of indicator gas into the breathing gas or gases flowing into the lungs of the subject during inhalation by the subject in at least one breath of a number of sequential breaths selected for determining functional residual capacity; summing the amounts of indicator gas delivered during the selected number of breaths to provide, for at least two given breaths in the selected number, the cumulative total of the amounts indicator gas delivered in the given breath and in all breaths preceding the given breath in the selected number of sequential breaths (.SIGMA.V.sub.in) determining a quantity representative of the amount of indicator gas removed from the lungs of the subject during exhalations by the subject in each breath of the number of sequential breaths; summing the quantities representative of the amounts of indicator gas removed from the lungs of the subject during the selected number of breaths to provide, for said at least two given breaths in the selected number, the cumulative total of the amounts indicator gas removed in the given breath and in all breaths preceding the given breath in the selected number of sequential breaths (.SIGMA.V.sub.out) obtaining an indication of the concentration of indicator gas in the lungs of the subject (F.sub.ET)for said at least two given breaths and resulting from the delivery and removal of the indicator gas amounts summed in said cumulative totals for said at least two given breaths; using the quantities .SIGMA.V.sub.in, .SIGMA.V.sub.out, and F.sub.ET as measured variables to form at least two measured value data sets in which the quantities are related by regression coefficients such that the product of the indicator gas concentration (F.sub.ET) and a first regression coefficient comprising the functional residual capacity (FRC) plus the product of the cumulative total of indicator gas removed from the subject's lungs (.SIGMA.V.sub.out) and a second regression coefficient K equals the cumulative total of the delivered indicator gas (.SIGMA.V.sub.in); and using said at least two measured value data sets and the relationship between .SIGMA.V.sub.in, .SIGMA.V.sub.out and F.sub.ET to obtain values for K and FRC, the value FRC so obtained being a determination of the functional residual capacity of the lungs of the subject.