The Nominal Interest Rate Is 4%,the Inflation Rate Is 1

question 65

Multiple Choice

The nominal interest rate is 4%,the inflation rate is 1% and the tax rate is 20%.Given U.S.tax laws,how is after-tax real return computed?

• A).03(1-.20)
• B).04(1 -.20)
• C).04(1 - .20)- .01
• D)None of the above is correct.

---

Definitions:

Bushels

A unit of volume that is used for measuring agricultural commodities, with the exact size varying by product and region.

Marginal Cost

The money needed to produce an additional unit of a product or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced, representing the variable cost incurred to produce each unit of output.

Marginal Cost

The leap in all-encompassing expenses associated with the production of an additional unit of a product or service.