The country of Lessidinia has a tax system identical to that of the United States. Suppose someone in Lessidinia bought a parcel of land for 20,000 foci (the local currency) in 1960 when the price index equaled 100 . In 2002, the person sold the land for 100,000 foci, and the price index equaled 600 . The tax rate on nominal gains was 20 percent. Compute the taxes on the nominal gain and the
change in the real value of the land in terms of 2002 prices to find the after-tax real rate of capital gain.
a. -60 percent
b. -30 percent
c. 30 percent
d. 60 percent
b
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A) the income received by firms, e.g. corporations B) an increase in GDP C) a decrease in GDP D) the after-tax income received by the household
If only two identical firms operate in a market, consumers prefer
A) a Cournot equilibrium. B) a Stackelberg equilibrium. C) a collusive equilibrium. D) any equilibrium since they all result in the same consumer surplus.
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a. True b. False Indicate whether the statement is true or false
Suppose a market basket of goods and services costs $1,000 in the base year and the consumer price index (CPI) is currently 110. This indicates the price of the market basket of goods and services is now:
A. $110. B. $1,000. C. $1,100. D. $1,225.