If the Nominal Interest Rate on Saving Is 5% and the Expected

question 35

Multiple Choice

If the nominal interest rate on saving is 5% and the expected inflation rate is 2%, what is the after-tax return on saving if the tax rate is 25%?

• A)1.75%
• B)2.25%
• C)3%
• D)5.75%

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Definitions:

Profit-Maximizing Strategy

A business approach aimed at achieving the highest possible profit, considering both revenue and costs.

Cattle Rancher

A cattle rancher is an individual who operates a ranch, managing the breeding, raising, and selling of cattle for meat or other products.

Mutton

The meat from sheep, especially mature sheep, used as food.

Consumer Preferences

The subjective tastes and preferences of consumers, which guide their purchasing decisions and choice behavior.