The following table shows the average nominal interest rates on six-month Treasury bills (indicating the amount of interest paid by the U.S. government when it issues debt) between 1971 and 1975. The table also shows the inflation rate for the years 1971 to 1975. (All rates are rounded to the nearest tenth of a percent.) 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. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment? 1971 1972 1973 1974 1975
The following table shows the average nominal interest rates on six-month Treasury bills (indicating the amount of interest paid by the U.S. government when it issues debt) between 1971 and 1975. The table also shows the inflation rate for the years 1971 to 1975. (All rates are rounded to the nearest tenth of a percent.) 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. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment? 1971 1972 1973 1974 1975
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The following table shows the average nominal interest rates on six-month Treasury bills (indicating the amount of interest paid by the U.S. government when it issues debt) between 1971 and 1975. The table also shows the inflation rate for the years 1971 to 1975. (All rates are rounded to the nearest tenth of a percent.)
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.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment ?
1971
1972
1973
1974
1975
Transcribed Image Text:?)
8.0
7.0
6.0
Nominal Interest Rate
5.0
4.0
Real Interest Rate
3.0
2.0
1.0
-1.0
-2.0
-3.0
-4.0
1970
1971
1972
1973
1974
1975
1976
YEAR
INTEREST RATE (Percent)
Transcribed Image Text:Nominal Interest Rate
Inflation Rate
Year
(Percent)
(Percent)
1971
4.5
4.4
1972
4.5
3.2
1973
7.2
6.2
1974
7.9
11.0
1975
6.1
9.1
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