In Questions Make the Assumption That the Change in Housing

question 78

Multiple Choice

In Questions make the assumption that the change in housing prices exactly matches the change in the CPI. In fact, housing is only part of the CPI, and figures into the CPI through rents rather than sale prices, so this assumption may be far from correct.
-Zeke bought a house in 1981 for $19,000 and sold it in 1997. If the 1981 CPI is 90.9 and the 1997 CPI is 160.5, how much would the house be worth in 1997 dollars?

• A) $26,300
• B) $27,860
• C) $29,808
• D) $33,548

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Definitions:

Outstanding Voting Stock

The shares of stock that are currently owned by shareholders, including restricted shares, that have voting rights in a corporation.

Consolidated Stockholders' Equity

The total amount of equity attributed to owners of a parent company, after adding the equity of all subsidiaries and eliminating inter-company transactions.

Voting Stock

Refers to shares that give the shareholder the right to vote on company matters, such as electing the board of directors.

Consolidated Income Tax Return

A single income tax return filed by a parent company and its subsidiaries, allowing for the consolidation of taxable income and tax payments to simplify tax reporting.