Use the table below to answer the following questions -

Data Table for Question 2

1975-09-01 - 30.737

1974-09-01 - 28.687

a) (5 points) Calculate the rate of inflation from September 1974 (1974-09-01) to September 1975 (1975-09-01).

b) (5 points) Suppose that you earned $15,000 per year back in September of 1975. Assuming that the current price index is 120, how much money would you have to make now to have the same purchasing power as $15,000 did back in September of 1975?

c) (5 points) In September 1974, the one year interest rate 8.52%. Calculate the ex-post real rate of interest.

d) (5 points) Given your answer in part c), is this an environment attractive to saving or spending? Explain.