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

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Definitions:

Plant Polysaccharide

Complex carbohydrates found in plants, consisting of long chains of monosaccharide units, and are important for energy storage and structural components.

Cellulose

A complex carbohydrate that forms the primary structural component of plant cell walls and is incapable of being digested by humans.

Carbohydrate

Organic compounds consisting of carbon, hydrogen, and oxygen, usually in a ratio of 1:2:1, serving as a major energy source for the body.

Sucrose

A disaccharide composed of glucose and fructose, commonly known as table sugar.