Jing,who Is Single,paid Educational Expenses of $16,000 in 2016

question 38

Multiple Choice

Jing,who is single,paid educational expenses of $16,000 in 2016.He redeemed Series EE bonds and received principal of $8,000 and interest of $3,000.Jing's has other adjusted gross income of $81,550.With respect to the $3,000 of bond interest,Jing must include in taxable income

• A)$0.
• B)$1,400.
• C)$1,600.
• D)$3,000.

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Definitions:

Status Quo Bias

The preference for maintaining current conditions or resisting change, even when better alternatives exist.

Anchoring Effect

A cognitive bias where an individual depends too heavily on an initial piece of information (the "anchor") when making decisions.

Endowment Effect

A psychological inclination to value possessions more highly solely due to personal ownership.

Endowment Effect

A mental occurrence in which individuals attribute increased worth to objects simply because they possess them.