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Go to http://www.bankofcanada.ca/en/ What Are the Current Nominal and Real Interest Rates? The real interest rate is the nominal rate less the rate of inflation. Assume the Consumer Price Index (CPI) is a proxy for the inflation rate and one-year Treasury Bill rates represent the nominal interest rate. Find the current CPI at the McConnell-Brue-Barbiero Web site (Chapter 13), and then subtract it from the current one-year Treasury Bill rate. Repeat the process for the one-month Treasury Bills and the CPI rate of change for the past one month. Is there a difference between the 1-month and the 12-month real interest rates? If so, why is there a difference? |