Solved: Calculate alexs real after tax capital gain, Macroeconomics

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Calculate alexs real after tax capital gain

Problem

Suppose Alex earned $500 (nominal capital gain) from selling stock he bought ten years ago. During the last ten years prices increased significantly, which means that Alex's real capital gain is only $300. If the tax applied to capital gains is 35%,

a) Calculate Alex's real after tax capital gain if the tax is applied to his nominal capital gain.

b) Calculate Alex's real after tax capital gain if the tax is applied to his real capital gain.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Calculate alexs real after tax capital gain

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