You Put Money into an Account and Earn a Real

question 66

Multiple Choice

You put money into an account and earn a real interest rate of 6 percent. Inflation is 2 percent, and your marginal tax rate is 20 percent. What is your after-tax real rate of interest?

• A)4.8 percent
• B)3.2 percent
• C)2.8 percent
• D)None of the above is correct.

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Definitions:

Biofeedback

A therapy technique that teaches individuals to improve their health and performance by controlling bodily processes that normally happen involuntarily.

Physiological Process

Biological functions or activities within living organisms that support life, such as respiration, digestion, and reproduction.

Intermittently

Occurring at irregular intervals; not continuous or steady.

Punishment

The imposition of a penalty or deprivation for wrongdoing, used as a method of discouraging undesirable behavior.