If the Nominal Rate of Interest Is 6 Per Cent

question 74

Multiple Choice

If the nominal rate of interest is 6 per cent and the real rate of interest is 10 per cent, the rate of inflation is _____.

• A) 4%
• B) -4%
• C) 3%
• D) -3%

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Definitions:

CCA Rate

Capital Cost Allowance Rate, a tax deduction in some jurisdictions that reflects the depreciation of property, plant, and equipment.

CCA Class

In the context of Canadian tax, a classification for tax purposes that dictates the rate at which assets can be depreciated for tax deductions.

After-Tax Lease Payment

The lease payment amount remaining after taxes have been deducted, reflecting the net cost to the lessee.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of income, or other factors.