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
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
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter29: Interest, Rent, And Profit
Section: Chapter Questions
Problem 1WNG
Related questions
Question
According to the table, in which year did buyers of six-month Treasury bills receive the highest real
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2d6b41d0-2c02-4c1f-addb-01bcbdab0813%2F122e9081-ffe0-4c34-8533-f98aba546aac%2Fh3jczw_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
![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 green
points (triangle symbol) to plot the real interest rates for those years.
8.0
7.0
6.0
Nominal Interest Rate
5.0
40
Real Interest Rate
20
10
1.0
20
30
1971
1972
1973
YEAR
1974
1975
1976
INTEREST RATE (Percent)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2d6b41d0-2c02-4c1f-addb-01bcbdab0813%2F122e9081-ffe0-4c34-8533-f98aba546aac%2F4vtkxk_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 green
points (triangle symbol) to plot the real interest rates for those years.
8.0
7.0
6.0
Nominal Interest Rate
5.0
40
Real Interest Rate
20
10
1.0
20
30
1971
1972
1973
YEAR
1974
1975
1976
INTEREST RATE (Percent)
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
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!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)