Question: 1 consider the following data fro the us economy year...
1) Consider the following data fro the U.S economy.
|Year||Interest Rates||Annual Inflation Rate|
a) Did borrowing costs rise or fall in the United States over the period? Explain your reasoning
b) Suppose in addition to the data given in question 1, you find a report from a bank dated 1981 that forecasts inflation increasing by 1% point in each of the following two years. What are the implied ex ante real interest rates?