w Yields of money market funds. Many people invest in money market funds. These are mutual funds that attempt to maintain a constant price of $1 per share while paying monthly interest. Table 10.3 gives the average annual interest rates (in percent) paid by all taxable money market funds from 1973 (the rst full year in which such funds were available) to 2008. a. Make a line graph of the interest paid by money market funds for these years. b. Interest rates, like many economic variables, show cycles, clear but repeating up- and-down movements. In which years did the interest rate cycle reach temporary peaks? c. A plot against time may show a consistent trend underneath cycles. When did interest rates reach their overall peak during these years? Describe the general trend downward since that year. :9". Table 10.3 Average annual interest rates (in percent) paid by money market funds, 19732008 Year Rate Year Rate Year Rate Year Rate 1973 7.60 2000 5.89 1974 10.79 2001 3.67 1975 6.39 2002 1.29 1976 5.11 2003 0.64 1977 4.92 2004 0.82 1978 7.25 2005 2.66 1979 10.92 2006 4.51 1980 12.68 2007 4.70 1981 16.82 2008 2.05 Data from Albert J. Fredman, \"A closer look at money market funds,\" American Association of Individual Investors Journal, February 1997, pp. 2221; and the 2010 StatisticaiAbstract of the United States. 18 16 14 12 10 Rates 8 6 4 Yields of Money Market funds 2 O 973 1974 1975 1976 1977 1978 1979 19 81 1982 1983 1984 1985 1986 987 988 989 990 991 Years 1992 1993 1994 1995 1996 1997 98 1999 OOO 2001 002 2003 2004 2005 2006 2007 2008