Related to the Economics in Practice on p.526: 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 ________.

Question

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The estate is currently earning 2 percent, but the interest rate on suitable securities is 5 percent. This means that the estate is not earning as much as it could be if it were invested in securities. A potential buyer should therefore require the price of the estate to be lowered until the equivalent return on the estate is greater than 5 percent.

Related to the Economics in Practice on P