Suppose you put $100 in the bank on january 1, 2017. if the annual nominal interest rate is 5 percent, the inflation rate is 2 percent, and the tax on interest income is 20%, you will be able to buy worth of goods on january 1, 2018, valued at 2017’s prices.

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Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.

When selecting a savings account, you should look at the following factors except annual percentage yield (apy) fees minimum balance interest thresholds taxes paid on the interest variable interest rates