Related to the Economics in Practice on P

Multiple Choice

Related to the Economics in Practice on p. 202: If the estate in the Chekhov play Uncle Vanya is earning 2 percent, the interest rate on suitable securities is 5 percent, and the securities are a better risk than the estate, a potential buyer should require the price of the estate be ________ until the equivalent return on the estate is ________.

A) raised; 5 percent
B) lowered; 5 percent
C) lowered; greater than 5 percent
D) raised; greater than 5 percent