Suppose the expected inflation rate is 0.01, the tax rate on interest income is 0.3, and the expected real after-tax interest rate is 0.0145. What is the nominal interest rate?
A. 0.025
B. 0.020
C. 0.035
D. 0.030
Answer: C
You might also like to view...
A movement along the AE curve arises from a change in ________, and a movement along the AD curve arises from a change in ________
A) the price level; the price level B) real GDP; investment C) real GDP; the price level D) the price level; investment E) investment; the price level
U.S. government purchases of gold are officially carried out by the
A) New York Federal Reserve Bank. B) Federal Open Market Committee. C) Federal Deposit Insurance Corporation. D) U.S. Treasury.
Which of the following is not true about the U.S. trade balance since 1979?
a. The balance of trade has been in deficit. b. During recessions the balance has usually been flat. c. The balance of trade has been in surplus. d. When the economy expanded, the demand for imports increased. e. When the economy expanded, the trade balance worsened.
Economic models are often expressed in
a. equations. b. words. c. graphs. d. physical objects..