Using the FRED database, create a single graph containing the 10-year government bond yield (one measure of a nominal interest rate) and the inflation rate for Italy. You may find it helpful to use the search terms “government bond yield Italy” and “inflation Italy” to locate these series. Also, FRED allows you to add a second series to the graph of your first series using the “Add Data Series” option.
(a) Display the graph for the years since 1991.
(b) Why do these two series tend to move together over time?
(c) What economic concept corresponds to the difference between these two series?