4. If the real interest rate were approximately constant, then in periods in which inflation is high, the nominal interest rate should be relatively high (because the nominal interest rate equals the real interest rate plus the inflation rate). Using annual data since 1948, graph the three-month Treasury bill interest rate

(FRED variable TB3MS, 3-Month Treasury Bill: Secondary Market Rate) and the CPI inflation rate for the U.S. economy. (Take annual averages of monthly interest rates and measure annual inflation rates as the change in the CPI from December to December.) Is it generally true that nominal interest rates rise with inflation? Does the relationship appear to be one-for-one (so that each additional percentage point of inflation raises the nominal interest rate by one percentage point), as would be the case if the real interest rate were constant? Calculate the real interest rate and graph its behavior since 1948.