Suppose That in Some Tax Year You Earned a Nominal

question 169

Multiple Choice

Suppose that in some tax year you earned a nominal interest rate of 4 percent. During the time you held these funds inflation was 1 percent. You compute that you made a real after-tax interest rate of 2 percent. What was your tax rate?

• A)50 percent
• B)33.3 percent
• C)25 percent
• D)None of the above are correct.

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Definitions:

Physical Illness

Any bodily disease or disorder, whether acute or chronic, that impairs normal functioning.

Cognitive Rigidity

A psychological disposition characterized by an inability to adapt or shift perspectives in the face of new information or changing environments.

Dichotomous Thinking

The tendency to categorize experiences, people, or items into two extreme and opposite groups.

Right Or Wrong

A moral or ethical judgment about actions or decisions based on societal, personal, or legal standards.