Homework (Ch 11)6.05.0Nominal Interest RateReal Interest Rate2.01.01996199719981999200020012002YEARAccording to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment?O 1997INTEREST RATE (Percent) The following table shows the average nominal interest rates on six-month Treasury bills between 1997 and 2001, 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 1997 to 2001. (Allrates are rounded to the nearest tenth of a percent.)Nominal Interest RateInflation FteYear(Percent)(Percent)19975,22.319984.81.519994.82.220005.93.420013.42.8Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stlouisfed.org.On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 1997 to 2001. Next, use the greenpoints (triangle symbol) to plot the real interest rates for those years.

According to the Fisher equation: Real interest rate = Nominal interest rate - inflation rate The…

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?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter17: Inflation

Section: Chapter Questions

Problem 20SQ

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Question

Homework (Ch 11)
6.0
5.0
Nominal Interest Rate
Real Interest Rate
2.0
1.0
1996
1997
1998
1999
2000
2001
2002
YEAR
According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment?
O 1997
INTEREST RATE (Percent)

The following table shows the average nominal interest rates on six-month Treasury bills between 1997 and 2001, 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 1997 to 2001. (All
rates are rounded to the nearest tenth of a percent.)
Nominal Interest Rate
Inflation Fte
Year
(Percent)
(Percent)
1997
5,2
2.3
1998
4.8
1.5
1999
4.8
2.2
2000
5.9
3.4
2001
3.4
2.8
Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stlouisfed.org.
On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 1997 to 2001. Next, use the green
points (triangle symbol) to plot the real interest rates for those years.

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