Inflation and interest rates

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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.)

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

Reference no: EM132066035

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