2. Inflation and the Incentive to Save Low inflation countryHigh inflation country Real interest rate Inflation rate Nominal interest rate Reduced interest due to a 25% tax 5% 3% 5% 11% After-tax nominal interest rate After-tax real interest rate (a) To see how inflation affects the incentive to save, complete the given above table for both the low inflation country and the high inflation country. (b) In which country is there a greater incentive to save? Why? (c) What could the government do to eliminate this problem? (d) What are the other costs of inflation when inflation is perfectly anticipated? What types of costs are the most harmful for the long-run economic growth?