Suppose That the Current Market Rate of Interest Is 10

question 23

Multiple Choice

Suppose that the current market rate of interest is 10 percent.The market rent on a parcel of land is $6,000 per year.A 10-percent land tax is imposed.As a result of the tax, the price of the land parcel:

• A)falls from $60,000 to $30,000.
• B)increases from $30,000 to $60,000.
• C)falls 10 percent.
• D)falls 20 percent.

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