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Answer:
Since the real rate of interest is negative, this means that the purchasing power of the savings have decreased over the year.
Explanation:
Data provided:
Interest rates = 7.85 %
The rate of inflation = 12.3 %
Now,
The Real interest rate is calculated as :
Real interest rate = Nominal interest rate - Inflation rate
on substituting the respective values, we get
Real interest rate = 7.85% - 12.3%
Or
The real interest rate = - 4.45%
Here,
Since the real rate of interest is negative, this means that the purchasing power of the savings have decreased over the year.
Consumers and business in the market economy seek to earn money so they can buy products so that they don't go out of business.
Based on the information given the gift tax in 2019 is $0.
Gift tax are tax that is imposed by the federal government on taxpayer for giving out gift.
The gift tax for 2019 is $15,000 annually which means that any taxpayer that gift someone else gift either as cash or property that is not above $15,000 will not be taxed or will not incurred any gift tax.
On the other hand any taxpayer that give out gift that is above $15,000 will be taxed which means that the giver will have to file a tax return reason being that the gift is above the recommend yearly gift tax exclusion amount of $15,000.
Based on the given scenario the amount Joshua gave his son which is $13,400 is not above the yearly gift tax of $15,000 which means that Joshua will not file a gift tax return.
Inconclusion the gift tax in 2019 is $0.
Learn more about gift tax here:brainly.com/question/7215286