Question

Inflation and the Quantity Theory of Money- Ask FRED Lets look at the inflation rate and the interest rate on 30-year mortgages in the United States. The accompanying diagram plots 30-vear mortgage rates with the percent change in the CPI, i.e.7.5 the annual rate of inflation 17.5 15.0 12.5 Lu 30-Year Fixed Rate Mortgage Average in 1981 16.64 the United States Vintage: 2018-02-01: Consumer Price Index for All Urban 1981 10.37831 Consumers: All Items Vintage: 2018 01-12: b0 5.0 2.5 0.0 2.5 1980 1990 2000 2010 1950 Sources: Freddie Mac, U.S. Bureau of Labor Statisticsb. In 1981 what was the average interest rate on a 30-year mortgage? 13.74 What was the inflation rate in 1981? Over the next 30 years, what was very approximately the inflation rate?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

It is clearly visible that average inflation rate in 1981 is 10. 37%.

Also over next 30 years, approximately inflation rate was at 5% by 2011 from CPI inflation graph.

Add a comment
Know the answer?
Add Answer to:
Inflation and the Quantity Theory of Money- Ask FRED Let's look at the inflation rate and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • flation and the Quantity Theory of ALFRED Money- Ask FRED 320,000 Let's get some practice converting...

    flation and the Quantity Theory of ALFRED Money- Ask FRED 320,000 Let's get some practice converting nominal values to real values. The accompanying graph depicts the median sales price for new houses sold in the United States in both nominal values and adjusted for inflation using the CPI 280,000 240,000 N 200,000 160,000 Median Sales Price for New Houses Sold 1980 64,708 in the United States Vintage: 2018-01-25: Median Sales Price for New Houses Sold in the United States Vintage:...

  • 2. Download the annual real GDP and GDP data of the United States 1950-2018 from FRED....

    2. Download the annual real GDP and GDP data of the United States 1950-2018 from FRED. For the real GDP, the data online is chain-weighted and uses 2012 as the base year. In the lecture hursday, I showed you the detailed method and calculated the new chain-weighted real GDP when 1990 is the base year. You are required to calculate a new sequence of chain- weighted real GDP given a new base-year. The base year you should use in your...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT