The higher inflation rate in year 2 reduced the incentive to save in Abudhabi. True or False?

Question

The table below shows the nominal interest rate and the inflation rate for two different years in the economy of Abudhabi. In both years, the Abudhabian government taxed nominal interest income from saving at a rate of 30%.


Year 1
Nominal Interest Rate 7%
Inflation Rate 2%

Year 2
Nominal Interest Rate 12%
Inflation Rate 6%


*****The higher inflation rate in year 2 reduced the incentive to save in Abudhabi. True or False?

Answer 1

70% of 7% is 4.9% minus adjustment for inflation leaving a net gain of 2.9%

70% of 12% is 8.4% minus adjustment for inflation leaving a net gain of 2.4%

I would say TRUE.

Answer 2

tax on interst income=30%
real interst rate= nominal interst rate + inflation rate
year1
real interest rate=7+2= 9%
year 2
real interest rate=12+6=18%
therefore people have an incentive to saved more, specially that the tax is constant i'd say
FALSE

Answer 3

False

Answer 4

I dont imagine there is any evidence pointing out that adult adult males have a decrease discomfort tolerance then female. female basically adventure discomfort extra (classes, newborn start) and adult adult males look to get whiney on the first signal of discomfort. Thats no longer to assert that in case you decrease your finger off you wouldnt deal with it better than a lady could. by personal adventure i am going to assert that i'm a wimp. If i decrease my finger and note a speck of blood i am going to fantastically a lot pass out, yet i had a toddler without discomfort drugs. completely diverse type of discomfort. solid success attempting to teach/disprove your theory.