The price of gold. Some people recommend that investors buy gold “to protect against inflation.” Here are the prices of an ounce of gold at the end of the year for the years between 1985 and 2007. Using Table 16.1, make a graph that shows how the price of gold changed in real terms over this period. Would an investment in gold have protected against inflation by holding its value in real terms?

Year: 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Gold price: $354 $523 $433 $380 $419 $386 $289 $288 $279 $415 $445 $695

(Hint: See pages 343–346.)