Suppose that the tax on interest income is levied on the nominal interest rate, the tax rate is 10 percent, and the real interest rate is 3 percent a year. There is no inflation. Calculate the after-tax real interest rate and the true tax rate on interest income. The after-tax real interest rate is percent. > Answer to 1 decimal place. The true tax rate on interest income is percent. >>> Answer to1 decimal place.

Suppose that the tax on interest income is levied on the nominal interest rate, the tax rate is 10 percent, and the real interest rate is 3 percent a year. There is no inflation. Calculate the after-tax real interest rate and the true tax rate on interest income. The after-tax real interest rate is percent. > Answer to 1 decimal place. The true tax rate on interest income is percent. >>> Answer to1 decimal place.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: Money Growth And Intlation

Section: Chapter Questions

Problem 6PA

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