Having Money Taken Out of Your Paycheck and Put in a Flexible

question 34

True/False

Having money taken out of your paycheck and put in a flexible spending account is one of the ways you can avoid paying taxes on the amount you spend for health care expenses.

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Definitions:

Taxes

Obligatory charges imposed by authorities on the earnings of employees and the profits of businesses, or applied to the price of various commodities, services, and financial activities.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society.

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved, often due to market failure, taxes, or subsidies.

Tax Revenue

The income that is obtained by governments through taxation, which is then used to fund public services and government operations.