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Assume the government taxes the interest income at a rate of 3 0 percent. If the nominal interest rate is 8 percent and the inflation

Assume the government taxes the interest income at a rate of 30 percent. If the nominal interest rate is 8 percent and the inflation rate is 4 percent, then the aftertax real interest rate is
a.2.8 percent
b.5.9 percent
c. None of the above
d.1.6 percent
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