1.

What direction of change in velocity could explain the price level increasing by a smaller

percentage than the money supply? What would this change in velocity imply about the

frequency with which money changes hands? please give me the detailed solution

2.

Explain why unemployment and employment rates can rise at the same time.

3.

You earn a nominal return of 6% on your savings and the tax rate is 20%. If the rate of inflation is 2%, what are the before-tax real interest rate and your after-tax rate of return?

I want to know which solution is the correct solution about this question.

Given that, Nominal return = 6% Savings and the tax rate = 20% Rate of inflation = 2% Calculate the after-tax rate of return: Before-tax real interest = 4% After-tax rate of return = 2.8% After-tax return before inflation = Nominal return x(1-Tax rate) = 6%(1-20%) Explanation: = 0.06 (1-0.20) Before-tax real interest = Nominal Return -Inflation Rate =6%-2% = 4% = 0.06 (0.80) After-tax rate of return=Nominal Return(1-tax rate) -Inflation Rate =6%(1-0.2) -2% = 6%*0.8 -2% = 2.8% = 0.048 ( or ) 4.8% After-tax real rate of return = 1+ After-tax return before inflation -1 1 + Inflation rate (1+4.8%) (1+2%) 1+0.048 1+0.02 1.048 1.02 =1.0275-1 = 0.0275 ( or ) 2.75% Thus, the after-tax real rate of return is 2.75%