Macroeconomics

Sally purchased one share of Strkyer stock for $200 in year 1 and sold that share in year 2 for $400. The inflation rate between year 1 and year 2 was 50%. The tax on nominal capital gains is 50%. Calculate the tax on Sally's capital gains.

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asked by Sarah
  1. Sally had a nominal capital gain of $200. With a 50% tax rate, she has a $100 liability.

    I believe the inflation rate is a red herring in this problem

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