for G=(0.005, 0.01, 0.015, 0.02, 0.025, 0.035, 0.4, 0.045, 0.0045, 0.05.) compute corresponding excess payment rate for both bonds and pensions ,based on assumptions that the smaller the value of excess payment rate the smaller the financial burden. explain what is desired inflation rate for the government regarding bond and pensions in terms of excess payments rates respectively, discuss the possible government inflation policy-making strategies when faced with two different interest rate objectives?

goverment mands Suppose that inflation note 16 G>O. Government increases a rate of 1.022G, nye toge solary mcreases at a of 1.83 +G, bono's are issued at a fixed coupon rate, pension increases at the rate of (1.03 + 620.02) (mimicking the uk govem mests tople stock policy the burden existing Grovement bond on public finances in the next time period Excess payment mte: rate bond interest increase wate of income more 0-1.02 & G =-1-02 G that if bonds are already been Ksued, the change wall in existing bond interest is zerolo). so measure in time period. We let, man (102) = 67,0.01)-1.02.09 measure Note of burden goverment mands Suppose that inflation note 16 G>O. Government increases a rate of 1.022G, nye toge solary mcreases at a of 1.83 +G, bono's are issued at a fixed coupon rate, pension increases at the rate of (1.03 + 620.02) (mimicking the uk govem mests tople stock policy the burden existing Grovement bond on public finances in the next time period Excess payment mte: rate bond interest increase wate of income more 0-1.02 & G =-1-02 G that if bonds are already been Ksued, the change wall in existing bond interest is zerolo). so measure in time period. We let, man (102) = 67,0.01)-1.02.09 measure Note of burden