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A lower inflation rate will decrease the after-tax real interest rate when the government taxes nominal interest income. a. True b. False

A lower inflation rate will decrease the after-tax real interest rate when the government taxes nominal interest income. a. True b. False
asked 23.4k views
4 votes
A lower inflation rate will decrease the after-tax real interest rate when the government taxes nominal interest income.

a. True
b. False

asked
User ColinE
by
7.9k points

1 Answer

6 votes

False, SHOULD INCREASE after-tax real interest rates.

answered
User HoloLady
by
8.6k points
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