The Country of Lessidinia Has a Tax System Identical to That

question 30

Multiple Choice

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

---

Definitions:

Birth Rate

A statistical measure showing the number of live births per 1,000 people in a given year, providing insight into population growth trends.

Aging Population

A demographic trend characterized by an increase in the median age of a population, often resulting from declining fertility rates and/or increasing life expectancy.

Fiscal Problems

Financial difficulties faced by a government due to a mismatch between its expenditures and revenues, leading to budget deficits and debt accumulation.

Poverty

The state of being extremely poor, with inadequate access to basic needs such as food, clean water, shelter, and education.