Fifteen years ago your parents purchased some land with the idea of selling it later to help pay your college expenses. They purchased the land for $100,000 . They sold if for $180,000 . During the time they held it the price level rose from 80 to 120 . If your parents face a 25% tax rate, what was their real after-tax gain? (Hint: What's the real value of the land in current prices?)
$10,000
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Money market mutual funds are included in
A) M1. B) M2. C) both M1 and M2. D) neither M1 nor M2.
If a coupon bond has a "face value" of $1000, it means that
A) the original purchaser paid $1000 for it. B) each purchaser must pay $1000 for it. C) it was purchased for at least $1000 and perhaps more. D) the holder will be paid $1000 when the bond matures. E) the holder will be paid $1000 plus accumulated interest when the bond matures.
When government debt is financed internally, future generations will
a. inherit a higher tax liability without additional interest income. b. inherit neither higher taxes nor additional interest income. c. inherit both higher taxes and additional interest income. d. receive lower interest income and a lower tax liability.
Purchasing power parity (PPP) measurements of income are a way to make international comparisons by correcting for national differences in
A) unemployment. B) inflation. C) prices of goods and services. D) economic growth.