Gary Cashed in an Insurance Policy on His Life

question 19

True/False

Gary cashed in an insurance policy on his life.He needed the funds to pay for his terminally ill wife's medical expenses.He had paid $12,000 in premiums and he collected $30,000 from the insurance company.Gary is not required to include the gain of $18,000 ($30,000 - $12,000) in gross income.

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Definitions:

U.S. Exports

involve products and services that are produced in the United States and sold to other countries, contributing to the country's GDP.

Aggregate Demand Curve

A graphical representation showing the relationship between the overall price level and the total demand for goods and services in an economy.

Marginal Propensity

The proportion of an additional income that an individual spends on consuming goods and services, rather than saving.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, suggesting how income influences spending behavior.