How Do EI, CPP, and Income Tax Deductions Differ from Other

question 2

Multiple Choice

How do EI, CPP, and Income Tax deductions differ from other payroll deductions -

• A) they are federal government amounts calculated by the program
• B) they are exempt from income tax
• C) they are deducted from the gross earnings
• D) they are entered just like any other deductions

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Definitions:

Efficient Price

Price level at which the quantity demanded and supplied in a market are at equilibrium, leading to an optimal distribution of resources.

Common Resources

Resources like air or water that are not owned by anyone, cannot be consumed by one user without reducing available supply for others, and are available to all.

Private Market

A market in which transactions occur directly between private sector buyers and sellers without significant government regulation or intervention.

Marginal Social Benefit

The additional benefit to society as a whole from producing or consuming one more unit of a good.