ASU ECN 211 EXAM 3 FORMULAS
(YOU MUST KNOW) QUESTIONS AND
CORRECT ANSWERS
RealA2InterestA2RateA2FormulaA2-A2Ans--realA2interestA2rateA2=A2nominalA2interestA2rateA2-
A2inflationA2rate
NominalA2InterestA2RateA2-A2Ans--
nominalA2interestA2rateA2=A2inflationA2rateA2+A2realA2interestA2rate
AfterA2TaxA2NominalA2InterestA2RateA2FormulaA2-A2Ans--after-
taxA2nominalA2interestA2rateA2=A2nominalA2interestA2rateA2(1-taxA2rate)
AfterA2TaxA2RealA2InterestA2RateA2FormulaA2-A2Ans--afterA2taxA2nominalA2interestA2rateA2-
A2inflationA2rate
MarginalA2PropensityA2toA2ConsumeA2(MPC)A2-A2Ans--
ChangeA2inA2ConsumptionA2dividedA2byA2changingA2inA2income
(YOU MUST KNOW) QUESTIONS AND
CORRECT ANSWERS
RealA2InterestA2RateA2FormulaA2-A2Ans--realA2interestA2rateA2=A2nominalA2interestA2rateA2-
A2inflationA2rate
NominalA2InterestA2RateA2-A2Ans--
nominalA2interestA2rateA2=A2inflationA2rateA2+A2realA2interestA2rate
AfterA2TaxA2NominalA2InterestA2RateA2FormulaA2-A2Ans--after-
taxA2nominalA2interestA2rateA2=A2nominalA2interestA2rateA2(1-taxA2rate)
AfterA2TaxA2RealA2InterestA2RateA2FormulaA2-A2Ans--afterA2taxA2nominalA2interestA2rateA2-
A2inflationA2rate
MarginalA2PropensityA2toA2ConsumeA2(MPC)A2-A2Ans--
ChangeA2inA2ConsumptionA2dividedA2byA2changingA2inA2income