Macroeconomics 12th Edition by William Baumol,Alan Blinder

Exercise 2

Long-term government bonds now pay approximately 4 percent nominal interest. Would you prefer to trade yours in for an indexed bond that paid a 3 percent real rate of interest? What if the real interest rate offered were 2 percent? What if it were 1 percent? What do your answers to these questions reveal about your personal attitudes toward inflation?