Question 1

Federal tax laws have traditionally allowed owners of investment properties to deduct all of the following EXCEPT

Accepted Answer

Federal tax laws have traditionally not allowed owners of investment properties to deduct depreciation on land.

Question 2

When a government prints more money than is necessary for economic growth, the result is

Accepted Answer

When a government prints more money than is necessary for economic growth, the result is a short-term drop in interest rates and a long-term drop in interest rates.

Question 3

Generally, for every job created by a base industry, there will be created in service industries approximately

Accepted Answer

Generally, for every job created by a base industry, there will be approximately two jobs created in service industries.

Question 4

The ECOA has contributed to greater numbers of homeowners among

Accepted Answer

The ECOA has contributed to greater numbers of homeowners among single persons, divorced persons, and employed women.

Question 5

Typically, most families acquire their largest and most expensive housing between ages

Accepted Answer

Typically, most families acquire their largest and most expensive housing between ages 45 to 55.

Question 6

Commercial property has a useful life under IRS guidelines of

Accepted Answer

Useful life for commercial depreciation allowances on real property is 39 years.

Question 7

When the supply and demand relationship in a market is unbalanced because of excess supply, it is to the advantage of

Accepted Answer

When the supply and demand relationship in a market is unbalanced because of excess supply, it is to the advantage of buyers.

Question 8

Which of the following terms would not apply to an industry that produces goods or services that are locally consumed ?

Accepted Answer

An industry that produces goods or services that are locally consumed can be called a service industry, secondary industry, or filler industry.

Question 9

In order to keep prices from falling in an economy that is growing at a 4 percent rate, which of the following is necessary?

Accepted Answer

In order to keep prices from falling in an economy that is growing at a 4 percent rate, a 4% increase in the money supply would be needed.

Question 10

Which has the greatest effect upon the interest rate an individual must pay for a real estate mortgage loan?

Accepted Answer

Federal governmental borrowing has the greatest effect upon the interest rate an individual must pay for a real estate mortgage loan.

Question 11

All of the following have made home purchases by persons of modest income easier EXCEPT

Accepted Answer

Creation of extra money by the Federal Reserve has not made home purchases by persons of modest income easier.

Question 12

Generally, a person's peak earning years occur at ages

Accepted Answer

Generally, a person's peak earning years occur at ages 45-55 years.

Question 13

From an investor's point of view, which is the most attractive allowable depreciation period for an investment property?

Accepted Answer

The most attractive allowable depreciation period for an investment property would be 15 years.

Question 14

When there is a sudden increase in the demand for housing in a community, the price of existing housing will

Accepted Answer

When there is a sudden increase in the demand for housing in a community, the price of existing housing will rise rapidly, then fall slightly as supply catches up with demand.

Question 15

Under federal tax laws that allow homeowners to deduct mortgage loan interest, what would be the after-tax cost to a homeowner in the 28 percent tax bracket of a home mortgage loan made at a 12 percent rate of interest?

Accepted Answer

The after-tax cost to a homeowner in the 28 percent tax bracket of a home mortgage loan made at a 12 percent rate of interest would be 8.64 percent.

Question 16

Industries which produce goods and services for export are referred to by all of the following terms EXCEPT

Accepted Answer

Industries which produce goods and services for export are referred to as base industries, export industries, or primary industries.

Question 17

Real estate values are affected by the federal government's

Accepted Answer

Real estate values are affected by the federal government's tax rules, laws, and deficits.

Question 18

The real estate brokerage industry is an example of a

Accepted Answer

The real estate brokerage industry is an example of a secondary industry.

Question 19

The Texagum manufacturing Company, which was the largest employer in the city of Westview, recently closed its plant in that city. This will probably result in

Accepted Answer

The closing of the Texagum plant will probably result in declining real estate values, a slow-down in the construction of new homes, as well as a decline in the population of Westview.

Question 20

The post-World War II baby boom includes persons aged

Accepted Answer

The post-World War II baby boom includes persons aged 35 to 40 in 1985.

Quiz 25: Real Estate and the Economy