If you average consumption in the United States over the past 5 years (cf. slide 14 of lecture 2) “by eye,”1 is consumption higher or lower in Germany? Briefly explain. calculate an inflation rate shown in the third lecture. Download the quarterly Consumer Price Index for All Urban Consumers: All Items in U.S. City Average data from the FRED website.Calculate the annual inflation rate time series from this data as the year-over-year percentage change in the price index. For example_p1980Q1=100(P1980Q1 – P1979Q1)/ P1979Q1-Label both the x-axis and the y-axis and include the units in the labels.-Label your calculated inflation either through a data key (as shown in the class slide) or as the title of your graph.-Annotate your graph with the source of your data. Calculate the one-year real rate of interest faced by the U.S. government given that expected inflation is now 2.47%/year (Source: FRB-Cleveland) and the nominal one- year U.S. Treasury rate is 0.0685% (Source: Investing.com). BusinessEconomicsMacroeconomicsECON 100B
