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U7Q10 TT.
Suppose that the current market rate of interest is 10 percent. The market rent on a parcel of land is $6,000 per year. A 10 percent land tax is imposed. As a result of the tax, the price of the land parcel:

falls from 60,000 to $30,000
increases from $30,000 to $60,000
falls 10 percent
falls 20 percent

Impact of tax on price of land.

U7Q10 TT.
Suppose that the current market rate of interest is 10 percent. The market rent on a parcel of land is $6,000 per year. A 10 percent land tax is imposed. As a result of the tax, the price of the land parcel:

falls from 60,000 to $30,000
increases from $30,000 to $60,000
falls 10 percent
falls 20 percent