Albert Purchased a Tract of Land for $140,000 in 2012

question 206

Multiple Choice

Albert purchased a tract of land for $140,000 in 2012 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $200,000.Highway engineers surveyed the property and indicated that he would probably get $180,000.The highway project was abandoned in 2015 and the value of the land fell to $100,000.What is the amount of loss Albert can claim in 2015?

• A)$40,000
• B)$60,000
• C)$80,000
• D)$100,000
• E)None of the above

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Definitions:

Interest-earning Assets

Financial assets that generate income through the payment of interest, such as savings accounts, bonds, and certificates of deposit.

Real GDP

The total value of all goods and services produced in a country in a year, adjusted for inflation.

Open-market Purchases

Transactions where a central bank buys government securities in the open market to increase the money supply.

Federal Funds Market

A market in which banks lend funds to one another for short-term periods, usually overnight, with interest rates determined by the supply and demand for these loans.