Question 2.4 18 pointsl Figure 1 depicts the data for two interest rates Funds R

Question

Question 2.4 18 pointsl Figure 1 depicts the data for two interest rates Funds Rate and the interest rate on the 5-year government bond. the Federal Based on the intuition from the answers to the previous questions, decide which of the data series (with triangles or with squares) is the Federal Funds Rate and which is the interest rate on the 5-year government bond (answer only into the blue book!). Explain your answer. During the years 2002 2004, did the households expect that the Fed would increase or decrease the Federal Funds rate? Explain your answer.

Explanation / Answer

The graph depicts

The income

The year

Maturity rate

tresury constant

And this will tell in detail furtherly

hence proved.

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