Eva and Lisa Each Retired This Year and Started Receiving

question 14

Multiple Choice

Eva and Lisa each retired this year and started receiving distributions from their respective retirement plans.Eva's plan was funded with all pre-tax contributions,whereas Lisa's plan was funded with only after-tax contributions (Roth plan) .With respect to the tax treatment of their retirement plan distributions

• A)distributions from both retirement plans will be fully taxable.
• B)Eva's distributions will be fully taxable,and Lisa's distributions will not be taxable.
• C)Eva's distributions will not be taxable,but Lisa's distributions will be fully taxable.
• D)neither Eva's nor Lisa's distributions will be taxable.

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Definitions:

Rationing Function

The ability of market prices to allocate scarce goods and services to those who are willing and able to pay for them.

Surplus Goods

Items for which the quantity supplied exceeds the quantity demanded, often leading to price reductions to clear excess inventory.

Competitive Market

A market where numerous sellers compete to sell their goods or services to a large number of buyers, promoting efficiency and innovation.

Law of Demand

The economic principle that there is an inverse relationship between the price of a good or service and the quantity demanded, assuming other factors are constant.