13, (10 points) The following example illustrates how inflation raises the tax burden on saving: Economy A Economy Be Nominal Interest Rate 5% 10% Inflation Rate 2% (b)- Real interest rate (a) 5 % Reduced interest due to 20% tax- (0.2 x nominal interest rate) (c ) (d) After-tax nominal interest rate (0.8 x nominal interest rate) (e) (f ) - After tax real interest rate (g) (he (1) Fill in with appropriate numbers: (a) (b) (c) (d) (e) (f ) (g) (h) (2) Which item provides the incentive to save? (a) Nominal Interest Rate (b) Inflation Rate (c) Real Interest Rate (d) After-tax nominal interest rate (e) after-tax Real Interest Rate (3) Which economy is more attractive in saving? (a) Economy A (b) Economy B (c) Economy A and Economy B are the same (d) None