A8) Assume that Jason lends out £3,000 to a friend with a nominal interest rate of 6% per year. The tax rate on interest

[answerhappygod]

A8) Assume that Jason lends out £3,000 to a friend with a
nominal interest rate of 6% per year. The tax rate on interest
earnings is 15%. In the first year, the inflation rate is zero. The
real net return for Jason is . In the second year, there is an
unanticipated inflation of 3%. Jason will become relative to his
friend.
a) 6%; worse-off
b) 5,1%; better-off
c) 6%; better-off
d) 5.1%; worse-off
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