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Answer the questions below.
a.Suppose the Fisher hypothesis holds for an economy that has an expected real interest rate of 3 percent.For each of the expected inflation rates of 0, 3, 6, 9, and 12 percent, calculate the after-tax expected real interest rate (expressed in percentage points with two decimals), if the tax rate is 15 percent.

b.Suppose the Fisher hypothesis does not hold, but instead that the after-tax expected real interest rate will be unchanged at 2.5 percent if the expected inflation rate changes.For each of the expected inflation rates of 0, 3, 6, 9, and 12 percent, calculate the (before-tax) expected real interest rate (expressed in percentage points with two decimals), if the tax rate is 15 percent.


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College Creed

A formal statement of beliefs, values, or principles set by a college or university community, guiding the institution's culture and actions.

Discrimination

Discrimination is the unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

Campus Involvement

Participation in activities and organizations within the college or university setting.

Part-time Job

A form of employment with fewer hours per week than a full-time position, allowing for flexibility or the pursuit of other activities.

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