3. A recent Credit Markets column in the WSJ (8/17/17) contained the statement, Most recently, government bonds have sold off after more comprehensive retail-sales data for July came in above analysts' expectations. Use the supply and demand apparatus discussed in class to explain how this event (better than expected retail sales) led to the change in bond prices (and therefore of interest rates) described in the article. First diagram the initial (before the event) equilibrium in the market for loans. Next, working in the context of the classical (Fisher) model discussed in class, explain what factor in the model changed as a result of this event. Then describe what curve in the diagram shifts in which direction as a result of this change, and add the new, shifted, curve to the diagram. Finally indicate on the diagram the change in interest rate and amount of lending that results, and explain how this corresponds to the sell-off of bonds described in the article. 3. A recent Credit Markets column in the WSJ (8/17/17) contained the statement, Most recently, government bonds have sold off after more comprehensive retail-sales data for July came in above analysts' expectations. Use the supply and demand apparatus discussed in class to explain how this event (better than expected retail sales) led to the change in bond prices (and therefore of interest rates) described in the article. First diagram the initial (before the event) equilibrium in the market for loans. Next, working in the context of the classical (Fisher) model discussed in class, explain what factor in the model changed as a result of this event. Then describe what curve in the diagram shifts in which direction as a result of this change, and add the new, shifted, curve to the diagram. Finally indicate on the diagram the change in interest rate and amount of lending that results, and explain how this corresponds to the sell-off of bonds described in the article