Answer the following questions based on information found in the table below a. Is there evidence of
Question:
Answer the following questions based on information found in the table below
a. Is there evidence of the deflation spiral from 1929 to 1933 in the United Kingdom?
b. Is there evidence of the effect of high real interest rates on output?
c. Is there evidence of a poor choice of the real policy interest rate by the central bank?
Transcribed Image Text:
The Nominal Interest Rate, Inflation, and the Real Interest Rate in the United Kingdom, 1929-1933 Year Unemployment Rate (%) Output Growth Rate (%) One-Year Nominal Interest Rate (%), i Inflation Rate (%), IT One-Year Real Interest Rate (%), r 1929 10.4 3.0 5.0 -0.9 5.9 1930 21.3 -1.0 3.0 -2.8 5.8 1931 22.1 -5.0 6.0 -4.3 10.3 1932 19.9 0.4 2.0 -2.6 4.6 1933 16.7 3.3 2.0 -2.1 4.1
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