You Put Money into an Account and Earn a Real

question 178

Multiple Choice

You put money into an account and earn a real interest rate of 4 percent. Inflation is 2 percent, and your marginal tax rate is 25 percent. What is your after-tax real rate of interest?

• A)1.5 percent
• B)2.5 percent
• C)5.0 percent
• D)4.5 percent

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Definitions:

Bureaucrats

Government officials and workers who run the day-to-day business of government, often associated with the administrative aspects of governance.

Political Control

The exertion of influence or authority over political activities, systems, or entities to guide their operation and objectives.

Ronald Reagan

The 40th President of the United States, serving from 1981 to 1989, known for his conservative policies and significant role in ending the Cold War.

George H.W. Bush

The 41st President of the United States, serving from 1989 to 1993, known for his foreign policy achievements and domestic economic challenges.