Suppose you make $200,000 per year before the 3% raise. Rather than spend more money, you take your additional salary and buy $6,000 of Microsoft stock. Suppose the stock increases in value, and you can sell it next year for $6,600. Therefore, you have a 5600 capital gain, or a 10% return on your investment. Suppose the tax rate on capital gains is 50%. After taxes, your capital gain is s Jor % Part 2 (1 point) See Hint Given the scenario from Part 1, which of the following inflation costs have you experienced? Choose one: A shoe-leather costs OB. tax distortions OC. wealth redistribution OD. money illusion
