Question: Plot the expected real interest rate since 1979 by subtracting the Michigan survey inflation measure (FRED code: MICH) from the three-month Treasury bill rate (FRED

 Plot the expected real interest rate since 1979 by subtracting the

Plot the expected real interest rate since 1979 by subtracting the Michigan survey inflation measure (FRED code: MICH) from the three-month Treasury bill rate (FRED code: TB3MS). Plot as a second line the ex post or realized real interest rate by subtracting from the three-month Treasury bill rate (FRED code: TB3MS) the actual inflation rate based on the percent change from a year ago of the consumer price index (FRED code: CPIAUCSL). What does it mean when these two measures are different? (Hints: First, graph the Treasury bill rate (FRED code: TB3MS); set the starting observation date in 1979; then, select "Add Data Series, " choose "Modify existing series" and select the appropriate "Data series" (1 or 2); at that point type the survey inflation measure (FRED code: MICH) in the search box. In the Formula box, type "a - b" if "a" corresponds to the interest rate ("b-a" if "a" corresponds to the survey inflation measure. Repeat the same operation for the realized real interest rate)

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