For each calculation be sure to describe what bond yields you are using as inputs (maturity date and coupon of bond; trading day reflected in data) as well as the source of your data. Explain why you chose the maturity date and coupon you used for your calculation.

3. Assume throughout this question that the economy is operating somewhat under its capacity. Recent reports signal increasing unemployment, while a survey of manufacturers investment plans suggests declining confidence in the business outlook.
   1. Use the loanable-funds model to analyze the immediate impact of this news on the real interest rate.
   3. What is the Feds monetary policy response to this news likely to be? Explain.
   4. Use the loanable-funds model to show the combined effect of both events (the news in the survey and the Feds reaction) on real interest rates.