Question :
61.Serenapurchased10sharesofGLC,Inc.stockfor$200pershare;oneyearlatershesoldthe10sharesfor$220ashare.Overtheyear,thepricelevelincreasedfrom135.0to143.1.Thetaxrateoncapitalgainsis50percent.Ifthecapitalgainstaxisonnomina : 1262109
61.Serenapurchased10sharesofGLC,Inc.stockfor$200pershare;oneyearlatershesoldthe10sharesfor$220ashare.Overtheyear,thepricelevelincreasedfrom135.0to143.1.Thetaxrateoncapitalgainsis50percent.Ifthecapitalgainstaxisonnominalgains,howmuchtaxdoesSerenapayonhergain?
a.$90
b.b.$95
c.c.$100
d.Noneoftheaboveiscorrect.
62.Supposeoneyearagothepriceindexwas120andMariapurchased$20,000worthofbonds.Oneyearlaterthepriceindexis126.Mariaredeemsherbondsfor$22,700andisina40percenttaxbracket.WhatisMaria’srealafter-taxrateofinteresttothenearesttenthofapercent?
a.5.1percent
b.3.1percent
c.2.1percent
d.2.4percent
63.ThecountryofLessidiniahasataxsystemidenticaltothatoftheUnitedStates.SupposesomeoneinLessidiniaboughtaparceloflandfor20,000foci(thelocalcurrency)in1960whenthepriceindexequaled100.In2002,thepersonsoldthelandfor100,000foci,andthepriceindexequaled600.Thetaxrateonnominalgainswas20percent.Computethetaxesonthenominalgainandthechangeintherealvalueofthelandintermsof2002pricestofindtheafter-taxrealrateofcapitalgain.
a.-60percent
b.-30percent
c.30percent
d.60percent
64.ThecountryofRobinyahasataxsystemidenticaltothatoftheUnitedStates.SupposesomeoneinRobinyaboughtaparceloflandfor10,000deera(thelocalcurrency)in1970whenthepriceindexequaled100.In2010,thepersonsoldthelandfor100,000deera,andthepriceindexequaled500.Thetaxrateonnominalcapitalgainswas20percent.Computethetaxesthepersonpaidonthenominalgainandthechangeintherealvalueofthelandintermsof2010pricestofindtheafter-taxrealrateofcapitalgain.
a.-20percent
b.20percent
c.42percent
d.64percent
65.KaitlynpurchasedoneshareofNorthwestEnergystockfor$200;oneyearlatershesoldthatsharefor$400.Theinflationrateovertheyearwas50percent.Thetaxrateonnominalcapitalgainsis50percent.WhatwasthetaxonKaitlyn’scapitalgain?
a.$50
b.$75
c.$100
d.$200
66.Stevepurchasessomelandfor$30,000.Hemaintainsit,butmakesnoimprovementstoit.Oneyearlaterhesellsitfor $32,000.Stephanieputs$30,000inasavingsaccountthatpays6%interest.Stevehastopaythe50%capitalgainstax,Stephanieisinthe35%taxbracket.Theinflationratewas2%.Whohadthehigherbefore-taxrealgainandwhohadthehigherafter-taxrealgain?
a.Stevehadboththehigherbefore-taxrealgainandthehigherafter-taxrealgain.
b.Stevehadthehigherbefore-taxrealgainbutStephaniehadthehigherafter-taxrealgain.
c.Stephaniehadthehigherbefore-taxrealgainbutStevehadthehigherafter-taxrealgain.
d.Stephaniehadboththehigherbefore-taxrealgainandthehigherafter-taxrealgain.
67.Indexingthetaxsystemtotakeintoaccounttheeffectsofinflationwouldbyitself
a.meanthatonlyrealinterestearningsaretaxed.
b.meananendtotaxingcapitalgains.
c.meananincreaseinaveragetaxrates.
d.Alloftheabovearecorrect.
68.Whichofthefollowingcostsofinflationcanbesignificantevenifactualinflationandexpectedinflationarethesame?
a.menucosts
b.inflationtax
c.shoeleathercosts
d.Alloftheabovearecorrect.
69.Whichofthefollowingiscorrect?Inflation
a.impedesfinancialmarketsintheirroleofallocatingresources.
b.reducesthepurchasingpoweroftheaverageconsumer.
c.generallyincreasesafter-taxrealinterestrates.
d.ismostcostlywhenanticipated.
70.Jennifertookoutafixed-interest-rateloanwhentheCPIwas100.SheexpectedtheCPItoincreaseto103butitactuallyincreasedto105.Therealinterestrateshepaidis
a.higherthanshehadexpected,andtherealvalueoftheloanishigherthanshehadexpected.
b.higherthanshehadexpected,andtherealvalueoftheloanislowerthanshehadexpected.
c.lowerthanshehadexpected,andtherealvalueoftheloanishigherthanshehadexpected.
d.lowerthenshehadexpected,andtherealvalueoftheloanislowerthanshehadexpected.