4. Problems and Applications Q4 When someone owns an asset (such as a share of stock) that rises in value, he has an "accrued" capital gain. If he sells the asset, he "realizes" the gains that have previously accrued. Under the U.S. income tax, realized capital gains are taxed, but accrued gains are not. True or False: Individuals' decisions about whether to keep or sell assets are not affected by this rule. O True O False Cuts in capital gains tax rates can raise tax revenue if the lower tax rate ▼ the volume of trade transactions by a large enough margin.

4. Problems and Applications Q4 When someone owns an asset (such as a share of stock) that rises in value, he has an "accrued" capital gain. If he sells the asset, he "realizes" the gains that have previously accrued. Under the U.S. income tax, realized capital gains are taxed, but accrued gains are not. True or False: Individuals' decisions about whether to keep or sell assets are not affected by this rule. O True O False Cuts in capital gains tax rates can raise tax revenue if the lower tax rate ▼ the volume of trade transactions by a large enough margin.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 37P: Imagine that a local water company issued 10,000 ten-year bond at an interest rate of 6. You are...

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