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Economic obsolescence is a loss in value of a property due to external factors and not due to the condition of the property itself. In this question, the construction of the freeway close to the owner’s house — an external factor — contributed to a loss in the value of the property. Answer Functional obsolescence relates to a loss in the property’s value due to outdated style or non-usable space. Answer Physical deterioration refers to a loss in the property’s value due to wear and tear, which is not referenced in the scenario of the question.