Suppose That in Some Tax Year You Earned a Nominal

question 15

Multiple Choice

Suppose that in some tax year you earned a nominal interest rate of 6 percent.During the time you held these funds inflation was 1 percent.You compute that you made a real after-tax interest rate of 3 percent.What was your tax rate?

• A)40 percent.
• B)33.3 percent.
• C)25 percent.
• D)50 percent.

---

Definitions:

Introductory Psychology

A beginner course offered in many educational institutions that covers the basic concepts, theories, and research findings in psychology.

Interference Theory

A theory in psychology that explains how new information can sometimes cause forgetting of old information.

Decay

The gradual reduction in the strength, quality, or quantity of something over time.

Peg Method

A mnemonic technique that involves associating items to be remembered with a list of peg words you have memorized in advance.