If the Real Interest Rate Is 4

question 19

Multiple Choice

If the real interest rate is 4.1 percent and the expected inflation rate is 0.7 percent,the nominal interest rate is

• A) 3.4 percent.
• B) 7.1 percent.
• C) 4.8 percent.
• D) 5.8 percent.
• E) 0.5 percent.

---

Definitions:

Personal Income Tax

A tax levied on individuals' earned income, including wages, salaries, and other earnings, differentiated by factors such as level of income, marital status, and others.

Federal Government Revenue

Federal government revenue consists of the money received by a government from taxes and non-tax sources to finance government activities.

Social Security Taxes

Social Security Taxes are taxes collected from employees and employers to fund the Social Security program, which provides retirement, disability, and survivor benefits.

Direct Tax

A tax levied directly on an individual's or organization's income or wealth, such as income tax or property tax.