When deciding how much to save,people care most about
A)after-tax nominal interest rates.
B)after-tax real interest rates.
C)before-tax real interest rates.
D)before-tax nominal interest rates.

Question

Quizplus · Accepted Answer

People are more concerned about the after-tax real interest rates as it takes into account the effect of inflation and taxes on their savings. Before-tax interest rates can be misleading as they do not consider the impact of taxes, while nominal rates may not capture the effects of inflation on the purchasing power of their savings. Hence, after-tax real interest rates give a more accurate picture of the actual returns on their savings.

When Deciding How Much to Save,people Care Most About