On January 5,2013,Tim Purchased a Bond Paying Interest at 6

question 103

Multiple Choice

On January 5,2013,Tim purchased a bond paying interest at 6% for $30,000.On March 31,2013,he gave the bond to Jane.The bond pays $1,800 interest on December 31.Tim and Jane are cash basis taxpayers.When Jane collects the interest in December 2013:

• A)Tim must include all of the interest in his gross income.
• B)Jane must report $1,800 gross income for 2013.
• C)Jane reports $1,350 of interest income in 2013,and Tim reports $450 of interest income in 2013.
• D)Jane reports $450 of interest income in 2013,and Tim reports $1,350 of interest income in 2013.
• E)None of the above is correct.

Comprehend the role and tools of the Federal Reserve in managing monetary policy.

Recognize the effects of monetary policy on the economy, including inflation and GDP gaps.

Identify the components and importance of bank reserves and the reserve requirement.

Understand the impact of Federal Reserve's policies on inflation, interest rates, and the money supply.

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