The following table gives three key U.S. interest rates in 1980 and again in 1993:

Provide an explanation for the extreme differences that you see. Specifically, comment on (1) the fact that rates in 1980 were much higher than in 1993 and (2) the fact that the long-term rate was higher than the short-term rate in 1993 but lower in 1980.

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1980 (%) 1993 (%) 11.39 Three month U.S. govemment bills Long-term U.S. govermment bonds Prime rate 3.00 6.59 6.00 11.27 15.26