You observe that the inflation rate in the United States is 2 percent per year and that T-bills currently yield 2.5 percent annually.
a. What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5 percent per year?
b. What do you estimate the inflation rate to be in Canada, if short-term Canadian government securities yield 8 percent per year?
c. What do you estimate the inflation rate to be in Taiwan, if short-term Taiwanese government securities yield 10 percent per year?