Merle Is a Widow, Age 80 and Blind, Who Is

question 146

Multiple Choice

Merle is a widow, age 80 and blind, who is claimed as a dependent by her son.During 2012, she received $4,800 in Social Security benefits, $2,200 in bank interest, and $1,800 in cash dividends from stocks.Merle's taxable income is:

• A)$4,000 - $950 - $2,900 = $150.
• B)$4,000 - $2,900 = $1,100.
• C)$4,000 - $950 - $1,450 = $1,600.
• D)$8,800 - $950 - $2,900 = $4,950.
• E)None of the above.

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Definitions:

Type I Error

A statistical error made by rejecting the null hypothesis when it is actually true, known as a false positive.

Type II Error

The failure to reject a false null hypothesis, also known as a "false negative."

Null Hypothesis

A statement positing that there is no significant difference or effect, serving as the default assumption in hypothesis testing.