In 2013 Grace Loaned Her Friend Paula $12,000 to Invest

question 41

Multiple Choice

In 2013 Grace loaned her friend Paula $12,000 to invest in various stocks.Paula signed a note to repay the principal with interest.Unfortunately the market for that industry sector plunged,and Paula incurred large losses.In 2014 Paula declared personal bankruptcy and Grace was unable to collect any of her loan.Grace had no other gains or losses last year or this year.The result is

• A)Grace deducts a business bad debt of $12,000 in 2014.
• B)Grace deducts a $12,000 nonbusiness bad debt as a short-term capital loss in 2014.
• C)Grace deducts a $3,000 nonbusiness bad debt as a short-term capital loss in 2014 and carries $9,000 over to subsequent years.
• D)Grace deducts a business bad debt of $3,000 in 2014 and carries $9,000 over to subsequent years.

Recognize the impact of voter preferences and behavior on election outcomes and decision-making processes.

Understand the concept of transitivity in individual preferences and its relevance in social choice and decision-making.

Identify and assess adverse selection problems in economic contexts.

Understand satisficing behavior and its implications on decision-making.