You have just purchased a home that cost $250,000. The nominal mortgage interest rate is 8% per annum, mortgage interest payments are tax deductible, and you are in a 30% tax bracket. The expected inflation rate is 4%. Maintenance and other expenses are 8% of the initial value of the house. What is the real user cost of your house?
A. $24,000
B. $30,000
C. $27,000
D. $20,000
Answer: A
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A) Consumer durables B) Nondurable goods C) Services D) Housing purchases
The definition of the velocity of money is
a. the money supply multiplied by prices divided by transactions. b. the number of times a unit of currency changes hands over a perid. c. money supply times prices divided by transactions. d. the fraction of total income held as money.
The label 'Asian Tigers' describes the following economies ________
A) China, South Korea, Singapore and Taiwan B) Hong Kong, Taiwan, South Korea and Singapore C) Singapore, Taiwan, Hong Kong, and China D) South Korea, Singapore, China and Hong Kong
The cross-price elasticity of two goods is 2. This tells us the two goods are:
A. substitutes. B. complements. C. unrelated. D. inelastic.