When deciding how much to save, what interest rates do people usually care most about?
A) after-tax nominal interest rates
B) after-tax real interest rates
C) before-tax real interest rates
D) before-tax nominal interest rates

Question

Quizplus · Accepted Answer

After-tax real interest rates are the interest rates that take into account inflation and taxes, and provide a clear picture of the actual return on savings. This is what people usually care most about when deciding how much to save. After-tax nominal interest rates and before-tax nominal interest rates only take into account the interest rate without considering inflation and taxes, while before-tax real interest rates only take into account inflation without considering taxes.

When Deciding How Much to Save, What Interest Rates Do