Suppose One Year Ago the Price Index Was 120 and Mark

question 300

Multiple Choice

Suppose one year ago the price index was 120 and Mark purchased $20,000 worth of bonds.One year later the price index is 126.Mark redeems his bonds for $22,250 and is in a 40 percent tax bracket.What is Mark's real after-tax rate of interest to the nearest tenth of a percent?

• A) 4.3 percent
• B) 3.1 percent
• C) 1.8 percent
• D) 1.2 percent

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Definitions:

Muriel Niederle

An economist known for her research in experimental economics and market design.

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An economist known for her research in the fields of public economics and experimental economics, focusing particularly on charitable giving and gender differences in competition.

College Degree

A formal certification by an educational institution recognizing the completion of a prescribed course of study in a particular field or discipline.

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Refers to women workers of African descent, acknowledging their specific experiences and challenges in the labor market.