-Sharmila Has a Budget Line for DVDs and Books

question 410

Multiple Choice

-Sharmila has a budget line for DVDs and books. DVDs are on the vertical axis and books on the horizontal. Her budget line becomes steeper as

• A) the price of a DVD falls.
• B) the price of a DVD rises.
• C) her income decreases.
• D) her income increases.

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Definitions:

Earned Income Credit

The Earned Income Credit (EIC) is a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children, to reduce poverty and encourage work.

Nonrefundable Credit

A tax credit that can only reduce a taxpayer’s liability to zero, but unlike refundable credits, any excess is not paid out to the taxpayer.

Adoption Credit

A tax benefit offered to taxpayers to offset some costs of legally adopting a child, which can reduce tax liability.

Foreign Tax Credit

A non-refundable tax credit for income taxes paid to a foreign country, aimed at reducing double taxation of the same income.