During a Period of Unanticipated Deflation

question 15

Multiple Choice

During a period of unanticipated deflation:

• A)debtors gain, because they repay their debts with dollars of diminished value
• B)people with partially indexed incomes suffer
• C)income is redistributed away from savers
• D)people on unindexed incomes are hurt
• E)debtors lose, because they repay their debts with dollars of greater value

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Definitions:

Withholding Allowance

A claim made by an employee on a W-4 form to reduce the amount of income tax withheld from their paycheck.

Taxable Income

The portion of an individual's or corporation's income that is subject to taxation by the government, after allowances, exemptions, and deductions.

Withholding Allowance

Withholding allowance refers to an exemption that reduces how much income tax an employer deducts from an employee's paycheck.

Taxable Income

The portion of an individual's or entity's income used to determine tax liability.