Given a nominal interest rate of 7 percent, in which of the following cases would you earn the lowest after-tax real rate of interest?
A)Inflation is 4 percent, and the tax rate is 25 percent.
B)Inflation is 3 percent, and the tax rate is 20 percent.
C)Inflation is 2 percent, and the tax rate is 15 percent.
D)Inflation is 1 percent, and the tax rate is 10 percent.

Question

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The Answer of Given a nominal interest rate of 7 percent, in which of the following cases would you earn the lowest after-tax real rate of interest?
A)Inflation is 4 percent, and the tax rate is 25 percent.
B)Inflation is 3 percent, and the tax rate is 20 percent.
C)Inflation is 2 percent, and the tax rate is 15 percent.
D)Inflation is 1 percent, and the tax rate is 10 percent.

Given a Nominal Interest Rate of 7 Percent, in Which