Tim receives a portion of his income from his holdings of interestbearing U.S. government bonds. The bonds offer a real interest rate of 2.5% per year. The nominal interest rate on the bonds adjusts automatically to account for the ination rate. The government taxes nominal interest income at a rate of 10%. The following table shows two scenarios: a lowinflation scenario and a high inflation scenario. Given the real interest rate of 2.5% per year, find the nominal interest rate on Tim '5 bonds, the aftertax nominal interest rate, and the after-tax real interest rate under each ination scenario. Inflation Rate Real Interest Rate Nominal Interest Rate After-Tax Nominal Interest Rate After-Tax Real Interest Rate (Percent) (Percent) (Percent) (Percent) (Percent) Compared with higher inflation rates, a lower inflation rate will V the after-tax real interest rate when the government taxes nominal interest income. This tends to V saving, thereby V the quantity of investment in the economy and V the economy's longrun growth rate