Suppose the market rate of interest is 5%. The local government imposes a tax of $40 per acre on all land located within city limits. The year after the tax is imposed, Val sells an acre of land on which she had planned to build a house. How much was Val's share of the economic burden of the tax?
a. $0.
b. $40.
c. $200.
d. $800.
d. $800.
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Oftentimes when a company's share price is very "high" it will choose to split the stock price and offer each shareholder one share for each they currently hold. Explain why companies might do this and what the effect is on shareholder wealth
What will be an ideal response?
What is the present value of $960 in one year if the current rate of interest is 6 percent?
A) $676.76 B) $905.66 C) $1,017.60 D) $1,449.46
Active policy making refers to
A) actions taken by policy makers in response to or in anticipation of some change in the overall economy. B) policy making that is carried out in response to a rule. C) relying on policies that act as automatic stabilizers. D) nondiscretionary policy making.
Firms tend to lower the price of their goods after acquiring a firm that sells a complementary good because
a. They gain market power b. There is an increase in the overall demand for their products c. The bundle has a more elastic demand than individual goods d. The bundle has a more inelastic demand than individual goods