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4. Inflation and interest rates The following table shows the average nominal Interest rates on six-month Treasury bills between 2014 and 2018, which determined the

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4. Inflation and interest rates The following table shows the average nominal Interest rates on six-month Treasury bills between 2014 and 2018, which determined the nominal Interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 2014 to 2018. (All rates are rounded to the nearest tenth of a percent.) Nominal Interest Rate (Percent) Inflation Rate (Percent) 0.1 1.6 0.1 Year 2014 2015 2016 2017 2018 0.2 0.5 1.3 1.1 2.1 Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stlouisfed.org. On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 2014 to 2018 Next, use the gree points (triangle symbol) to plot the real interest rates for those years. Nomina interest Rate Real Interest Rate INTEREST RATE (Percent) 2013 2014 2015 2016 YEAR 2017 2018 2019 According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment? 2014 2015 2016 2017 2018

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