Go to the St. Louis Federal Reserve FRED database, and find data on real GDP (GDPC1), real private domestic investment (GPDI), corporate profits (CP), a measure of the price level (PCECTPI), a measure of economic uncertainty (USEPUINDXM), and a measure of real interest rates (FII5). Convert the real interest rate and uncertainty data series to “Quarterly” under the frequency setting. Download all the data onto a spreadsheet, and convert the corporate profits series to real corporate profits. To do this, for each quarter, take corporate profit and divide by the price index, then multiply by 100.

a) Calculate the level change in real GDP over the most recent four quarters of data available and over the previous four quarters before that.

b) Calculate the level change in real corporate profits, the uncertainty index, the change in the real interest rate, and the change in investment over the most recent four quarters of data available and over the previous four quarters before that.

c) Are these results consistent with what you would expect? How do your answers to part (b) above help explain, if at all, the answers to part (a)? Explain as it relates to the IS and AD curves.