If Actual Inflation Was 4 Percent Over the Past Year

question 6

Multiple Choice

If actual inflation was 4 percent over the past year and you owned a one-year bond that paid 6 percent interest, what was your after-tax realized real interest rate if your tax rate was 15 percent?

• A)−0.6 percent
• B)0.0 percent
• C)1.1 percent
• D)2.0 percent

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Definitions:

Caudate Nucleus

A nucleus located within the brain that plays important roles in various neural functions, including the regulation of voluntary movement.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting heart rate, blood pressure, and blood sugar levels.

Anorexia Nervosa

A serious eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to self-imposed starvation and excessive weight loss.

Hypothalamus

Component of the brain that regulates eating, drinking, sex, and basic emotions; abnormal behaviors involving any of these activities may be the result of dysfunction in the hypothalamus.