Individuals Base Their Demand for an Asset on

question 19

Multiple Choice

Individuals base their demand for an asset on

• A) the expected return the asset offers compared with the returns offered by other assets.
• B) the riskiness of the asset's expected return.
• C) the asset's liquidity.
• D) the expected return, how risky that expected return is, and the asset's liquidity.
• E) the aesthetic qualities of the asset.

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Definitions:

FICA Taxes

FICA Taxes are payroll taxes collected to fund the Social Security and Medicare programs, split between the employer and the employee.

Payroll Tax Expense

The taxes that employers are required to withhold and pay on behalf of their employees, including Social Security and Medicare taxes.

State Unemployment Taxes

Taxes paid by employers to the state to fund unemployment insurance programs for workers who have lost their jobs.

Federal Unemployment Taxes

Taxes imposed by the federal government on employers to fund unemployment benefits for workers who have lost their jobs.