Go to the CANSIM data available in the Student Resources section of your MyEconLab website and download monthly data since 1953 for the three-month T-bill rate (series V122541) and the total consumer price index (series V41690973).

a. What is the average year-over-year inflation rate, using the formula

b. What is the average T-bill rate?

c. Assume that the expected inflation rate is the same as the actual inflation rate (a restrictive assumption!) and calculate the average real interest rate, r.

Transcribed Image Text:

100 x (P, – P-12)/P-12 %3| 12