In Which of the Following Entities May an Owner-Employee Benefit

question 15

Multiple Choice

In which of the following entities may an owner-employee benefit from all employee tax-free fringe benefits?

• A)C Corporation
• B)S Corporation
• C)Partnership
• D)Sole Proprietorship

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Definitions:

Equilibrium GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand, indicating a stable economy with no tendency for change in the price level or output.

Multiplier

Any change in spending (C, I, or G) will set off a chain reaction leading to a multiplied change in GDP. Equation is 1/(1 - MPC).

Federal Budget Deficit

A situation where the government's expenditures exceed its revenues over a specific fiscal period.

Real Interest Rates

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to investors.