Answered

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.

Answer :

MissPhiladelphia
For the answer to the question above, The equation you want to use for determining real rates is...nominal rate minus inflation=real rate. 

'71 was -3% 
'72 was -3% 
'73 was -.5% 
'74 is -1% 
'75 was 0% 

So 1975 is the only year their assets didn't erode from inflation! I guess they should have bought equities/stocks!

Other Questions