According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment?O. 1971O. 1972O. 1973O. 1974O. 1975 4. Inflation and interest ratesThe following table shows the average nominal interest rates on six-month Treasury bills between 1971 and 1975, which determined the nominalinterest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 1971 to 1975. (Allrates are rounded to the nearest tenth of a percent.)Nominal Interest RateInflation RateYear(Percent)(Percent)19714.54.219724.53.319737.26.319748.011.019756.19.1Source: "FRED Economic bata, Federal Reserve Bank of St. Louis, last modifed September 23, 2019, accessed September 24, 2019, https://fred.stiouisfed.org. On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 1971 to 1975. Next, use the greenpoints (triangle symbol) to plot the real interest rates for those years.8.07.06.0Nominal Interest Rate5.040Real Interest Rate20101.02030197119721973YEAR197419751976INTEREST RATE (Percent)

Real Rate of Interest = Nominal Rate of Interest - Inflation Rate A real rate of interest is…

Answered: According to the table, in which year…

According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment? O. 1971 O. 1972 O. 1973 O. 1974 O. 1975

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 2 5 real interest rate 3 2 0 3 + S3 5 Loanable funds S1 D1 Refer to the figure above. If the economy…

A: The loanable funds market is the place where the supply and demand for funds determine interest…

Q: In 2008, real GDP in the United States was $13,312 billion. In 2009, real GDP in the United States…

A: Real GDP in 2008=$13,312Billion Real GDP in 2009=$13,112Billion Growth Rate=(Final Value-Initial…

Q: Year 2013 $8,700 2014 $8,875 2015 $9,000 2016 $9,280 sing the table above, what is the approximate…

A: Average annual growth rate can be defined as the average rise in the value of an investment, asset,…

Q: DI C S C↑ S 400 350 50 360 40 500 430 70 440 60 600 510 90 520 80 The initial consumption and saving…

A: Marginal propensity to save (MPS) is the percentage or fraction of the isposable income that…

Q: If the combination r= 10% and Y = $200 billion is on the IS curve, we know that the combination r=…

A: IS curve shows the inverse relationship between rate of interest and income level.

Q: If the federal government wishes to combat inflation with a policy that has the smallest impact on…

A: Inflation, the rise in the general Price level of goods and services, is a concern for governments…

Q: Which statement is not true of fluctuations around the level of potential output? Multiple Choice…

A: Fluctuations around the level of potential output, commonly referred to as the business cycle, are a…

Q: Suppose that the economy of the United States has an investment schedule that is reflected in the…

A: There is an inverse relationship between planned real investment and the annual rate of interest.…

Q: A household has $6 in wealth, which allocates between consumption and savings. The MB from…

A: The marginal benefit is the pleasure a buyer feels after acquiring an additional commodity or…

Q: True of False? In the short run, stock market returns always align with macroeconomic performance…

A: 1. As a general rule, the stock markets in an economy are directly correlated with the GDP of the…

Q: Ann has $600,000 that she could consume or leave as a bequest to her daugh ter. Plotting her…

A: Total wealth or income = $600,000 Ann could consume or leave the wealth as a bequest, so the…

Q: 6. Given the following Cobb-Douglas production function for Jordan Economy. Y = AK^0.7 L^0.3. What…

A: Cobb-Douglas production function for Jordan Economy; Y1=AK0.7L0.3 Increase in capital stock= 10%…

Q: Real interest rate Supply, S Demand Loanable funds (billions of dollars per year) Which of the…

A: The real interest rate .is the best measure of the benefit and cost of borrowing to lending as it is…

Q: 3.7 points Save An Assume that real GDP per capita in Country X is currently $50,000 per person.…

A: Real GDP: It refers to the actual amount of GDP of the economy. It shows the rate under which the…

Q: Find the growth rate of an economy if it's gross domestic product rose from $500,000 to $880,000…

A: The economies around the globe are involved in various types of economic, as well as financial…

Q: ppose mortgage rates are increasing from 5% to 9%, and the rate of using prices is expected to rise…

A: The answer is - C. People are less likely to buy houses, because the real cost of financial a house…

Q: Which of the following best describe/s an inside lag in policymaking? (1) The central bank raises…

A: The period of time it takes for a policy to be implemented after it has been chosen by policymakers…

Q: To create inflation, aggregate demand must increase True O False

A: Since you have asked multiple questions we are answering the first question for you. If you want…

Q: Suppose that both Friedman and Fisher are absolutely correct. Assume that over many years money…

A: Money Supply refers to the quantity of money that is supplied or released into the economy of a…

Q: 12

A: The wealth of the consumer or the producer refers to the current endowment along with the future…

Q: Question 15 B Investment ($B) Real Domestic Product, GDP ($B) Refer to the diagrams. Other things…

A: Curve A shows the negative relationship between rate of return and investment. Curve B is a…

Q: Suppose that you have an AEF at a price level of p = $100 given by: AEF = 1,200+ 0.80Y Suppose also…

A: In the Aggregate Expenditure Function (AEF) we have an autonomous part and induced part. The 1,200…

Q: What effect will each of the changes listed in Study Question 3 of Chapter 27 have on the…

A: GDP (Gross Domestic Product): It refers to the production of goods and services which are being…

Q: A small county wants to increase its real GDP from $18,000 to $36,000. If they want this to happen…

A: Using Rule 70, the Growth rate can be calculated as follows: Number of Years = 70Growth rate

Q: Which of the following is an expression representing the IS curve O a. 0.65Y = 2325 - 50i O b. 0.65Y…

A: IS equation is calculated by solving product market equilibrium conditions. At equilibrium, the…

Q: O l 45 l 14% È 07:27 www.bartleby.com/solution-ar C = bartleby Q&A Business / Economics / Principles…

A: The consumer price index (CPI), measures the average level of prices of the basket of goods and…

Q: The base year is 2009. Your nation's GDP is $1,000 billion. The amount of inflation between 2009 and…

A: Understanding GDP and Inflation:1. GDP (Gross Domestic Product):Definition: GDP represents the total…

Q: I need help answer please quickly fast don't copy

A: The wealth of the consumer or the producer refers to the current endowment along with the future…

Q: The quantity of loanable funds supplied increases if the real interest rate rises, all other things…

A: The action by the monetary authorities to either expand or tighten the economy and its money flow is…

Q: The five most important variables that determine the level of consumption are O wealth, savings…

A: A consumption function defines the relationship between the level of consumption and various factors…

Q: D Question 26 A corporation issues a bond with a par value of $4,800 in one year. Assume that the…

A: The Par value of a bond is $4800. Bond sold at $4500. The bond matures in one year.

Q: 1. Suppose you’ll have an annual nominal income of $40,000 for each of the next 3 years, and the…

A: To find the real value of 1 USD in the future for given inflation rate, i is given as below.…

Q: LAST WORD Assume that you borrow $5,000, and you pay back the $5,000 plus $250 in interest at the…

A: Nominal interest rate is such interest rate which is derived before taking inflation into…

Q: Indicate whether you agree or disagree with the following statement: "In years when people buy many…

A: National income analysis is an important statistic for examining an economy's health because it…

Q: If consumers decide to save a larger percentage of their incomes, it will most likely be O a)…

A: The outcome of people attempting to save more is a decrease in output while saving remains…

Q: The present worth of an arithmetic gradient will always be located: Select one: O a. the same period…

A: When making financial analysis, different types of analytical tools are used based on the…

Q: 133. Assume that the sum that individuals devour is equivalent to 80% of their extra cash of the…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: Interest rate (%)| Supply Demand Quantity of financial capital (% of GDP) Suppose that the graph…

A: An expansion in the fiscal deficit, in principle, can help a languid/sluggish economy by giving more…

Q: Using the table, what is the real GDP growth from 2001 to 2002? O 50% YEAR O 1.25% 2001 2002…

A: Real GDP is calculated by using the base year prices as adjusted for inflation. Real GDP = base year…

Q: 1. LO 2 In the Malthusian model, suppose that the quantity of land increases. Using diagrams, deter-…

A: The basic exponential growth model is the Malthusian model. It states that the rate of expansion of…

Q: do fast.

A: The question is asking about the ratios that are used to determine whether borrowers have the…

Q: consumer's income in the current period is y= 100, and income in the future period is y'= 120. He or…

A: The above question is based on the concept of inter-temporal choice. In this concept, the consumer…

Q: According to the text, a "multiplier" is used as an assessment and evaluation tool for several…

A: The proportion by which a particular variable increases/decreases as a response to fluctuations in…

Question

According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment?

O. 1971

O. 1972

O. 1973

O. 1974

O. 1975

4. Inflation and interest rates
The following table shows the average nominal interest rates on six-month Treasury bills between 1971 and 1975, which determined the nominal
interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 1971 to 1975. (All
rates are rounded to the nearest tenth of a percent.)
Nominal Interest Rate
Inflation Rate
Year
(Percent)
(Percent)
1971
4.5
4.2
1972
4.5
3.3
1973
7.2
6.3
1974
8.0
11.0
1975
6.1
9.1
Source: "FRED Economic bata, Federal Reserve Bank of St. Louis, last modifed September 23, 2019, accessed September 24, 2019, https://fred.stiouisfed.org.

Formula Formula ROI (%) = Net Income Principal Amount × 100

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

36
Which of the following would ↑ the Qd of LF? Select one: O A. expected profit decreases. B. the real interest rate rises. O C. the real interest rate falls. D. the supply of loanable funds decreases. E. wealth increases. Clear my choice
A decrease in stock prices will the net wealth of households and consumption. O a. reduce; not change b. increase; decrease c. reduce; increase d. reduce; decrease e. increase; increase
Please do fast ASAP fast
Please please solved by rule 70
5. LO 2,5 A consumer receives income y in the current period and income y' in the future period, and pays taxes of t and t' in the current and future periods, respectively. The consumer can borrow and lend at the real interest rate r. This consumer faces a constraint on how much he or she can borrow, much like the credit limit typically placed on a credit card account. That is, the consumer cannot borrow more than x, where x < we-y+t, with we denoting lifetime wealth. Use diagrams to determine the effects on the consumer's current consumption, future consumption, and saving of a change in x, and explain your results.
32
Inflation the cost of holding money and the after-tax real interest rate. O A. increases; does not change O B. decreases; increases O C. decreases; decreases D. increases; increases O E. increases; decreases
13. Suppose that expected inflation is equal to the nominal interest rate. Also, the nominal interest rate is moderately high (e.g., 15%). Suppose that a firm wants to finance some physical investment-purchasing of new machines-by issuing new bonds. Also, assume that the real return of the new machines is positive. What will be the decision of the company? A. It won't invest because the nomimal interest rate is too high. B. It will invest because prices will be higher in the future. C. It won't invest because the expected real interest rate is too low. D. It will invest because despite a low expected real interest rate, prices will be higher. E. It will invest because the expected real interest rate is lower than the real return of the new machines. 14. Which of the following best explains why the decrease in the markup caused the natural rate of unemployment to fall? A decrease in the markup shifts A. the wage-setting relation leftward, decreasing the natural rate. B. the…
D Question 14 Suppose for the country of Joshua-land, the annual inflation rate is 7%, the population growth is 5% per year while GDP increases by 2% per year. How long would it take for the country to double its GDP? O 7 years O 14 years 35 years O Never Question 15 For the previous question, how long would it take Joshua-land to double its GDP capita? per O 7 years O 14 years O 35 years Never Question 16 For Joshua land, how long would it take for prices to double? O 7 years O 10 years 35 years O Not enough information
ctrl tab shift ↑ caps lock REAM Stream esc Question 3 K →1 Moving to another question will save this response. fn Which of these is among the principal determinants of economic growth? O the financial system stabilization policy the government budget deficit the central bank inflation A Moving to another question will save this response. O Type here to search ? (2 2 N W S f3 # 3 alt x f4 101 LA 4 Ai E R C % LL LO 5 T 6 G f7 hp & Y 7 H fg a V B N CO 19 8
This refers to an income instrument that represents a loan by an investor to a borrower. O A. Stock О В. Вond O C. Inflation O D. Interest