4. Inflation and interest rates The following table gives the average nominal interest rates on six-month Treasury bills spanning the years 2004 and 2008, which determined the nominal interest rate paid by the U.S. government when it issued debt in that time period. The table also gives the inflation rate for the years 2004 to 2008. (All rates rounded to the nearest 0.1 percent.) Year 2004 2005 2006 2007 2008 Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stouisted.org. sent) On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 2004 to 2008. Next, use the green points (triangle symbol) toplot the real interest rates for those years. 50 Nominal Interest Rate Inflation Rate (Percent) (Percent) 1.6 2.7 3.4 3.4 4.8 3.2 4.4 2.9 1.6 3.8 40 3.0 Nominal Interest Rate

4. Inflation and interest rates The following table gives the average nominal interest rates on six-month Treasury bills spanning the years 2004 and 2008, which determined the nominal interest rate paid by the U.S. government when it issued debt in that time period. The table also gives the inflation rate for the years 2004 to 2008. (All rates rounded to the nearest 0.1 percent.) Year 2004 2005 2006 2007 2008 Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stouisted.org. sent) On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 2004 to 2008. Next, use the green points (triangle symbol) toplot the real interest rates for those years. 50 Nominal Interest Rate Inflation Rate (Percent) (Percent) 1.6 2.7 3.4 3.4 4.8 3.2 4.4 2.9 1.6 3.8 40 3.0 Nominal Interest Rate

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

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