Economics: Government Spending and Taxation

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What is the primary purpose of form W-4?

To declare income and tax liability to the federal government

To report interest income earned

To summarize total earnings and taxes withheld for the year

To establish the amount of money that should be withheld from a paycheck (correct)

Which form will Dwight's employer send him to summarize his total earnings and taxes withheld for the year?

W-2 (correct)

1040

1099INT

W-4

What is the deadline for filing a tax return?

June 15th

January 15th

March 15th

April 15th (correct)

What programs does FICA fund?

Social Security and Medicare Signup and view all the answers

Which benefit listed on Ajay's pay stub is optional for his employer to provide?

401(k) Signup and view all the answers

What is Jill's primary financial goal?

To save more money and not live paycheck to paycheck Signup and view all the answers

What happens when you make a purchase with your debit card?

The amount charged is automatically deducted from your checking account. Signup and view all the answers

What is the advantage of choosing a bank that is a member of the FDIC?

Your deposits will be insured up to a maximum amount in the event that the bank goes out of business. Signup and view all the answers

What action is still necessary for Jeff to do when using direct deposit?

Record the deposit Signup and view all the answers

What is a benefit of using a debit card?

You can avoid overspending by only spending what you have. Signup and view all the answers

What is an advantage of planning and tracking your expenses?

You will be able to save more money. Signup and view all the answers

What is an example of how to establish a good credit history?

Applying for a credit card at a bank and paying your bill on time. Signup and view all the answers

What is the income type that Jill's employer withholds taxes and other deductions from?

Gross income Signup and view all the answers

Which of the following statements accurately describes which income will determine Jill's budget?

Her taxes are taken from her net income, while her budget should be based on her gross income. Signup and view all the answers

What type of expense is Jill's clothing expenditure?

Variable expense Signup and view all the answers

Which of the following expenses is a fixed expense that Jill cannot decrease?

Rent Signup and view all the answers

What is one of the advantages of effective budgeting and money management that Jill will experience?

Jill will be able to track her expenses from month to month and make adjustments as needed. Signup and view all the answers

What is NOT one of the advantages of effective budgeting and money management that Jill will experience?

Jill will be able to reduce her savings. Signup and view all the answers

What is the main purpose of the categories listed in the table?

To assess an applicant's credit worthiness Signup and view all the answers

Which of the following is NOT a category for assessing an applicant's credit worthiness?

Credibility Signup and view all the answers

Based on the information provided, which applicant would be the best choice to receive the home loan?

Applicant A Signup and view all the answers

Who gives the final credit approval for this loan?

The Lender, Harris Bank Signup and view all the answers

What should Lian consider most if she plans to only pay the minimum balance due each month?

Annual Percentage Rate Signup and view all the answers

What advantage would a grace period provide Lian if she pays her balance in full each month?

Avoid interest charges Signup and view all the answers

What is the primary purpose of the federal income tax according to the text?

To fund welfare payments for the economically disadvantaged Signup and view all the answers

What type of tax takes a larger percentage of income from high-income people?

Progressive tax Signup and view all the answers

What is the main purpose of filing a tax return?

Calculating how much you actually owe in taxes for the past year Signup and view all the answers

What is the term for the situation when the government spends more than it receives in revenue?

Budget deficit Signup and view all the answers

What is the purpose of a 1099-INT form?

To report interest earned from a savings account Signup and view all the answers