Sally Is an Electrician Employed by Bogie Company

question 94

Multiple Choice

Sally is an electrician employed by Bogie Company. Sam is a self-employed electrician. During the current year, Sally's salary is $85,000 and Sam's net self-employment income is $85,000. Which of the following statements about the Social Security and self-employment taxes paid is/are correct?
I.Sam's self-employment tax is greater than the Social Security tax paid on Sally's income.
II.Sam and Sally pay the same amount of tax.
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• A)Only statement I is correct.
• B)Only statement II is correct
• C)Both statements are correct
• D)Neither statement is correct

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Definitions:

Parameter

A numerical characteristic or measure that describes and summarizes a whole population.

Statistic

is a single measure, calculated from sample data, used to infer or describe properties of a population.

Significance Level

A threshold for determining whether a statistical result is considered statistically significant, usually denoted by alpha (α).

Statistical Inference

The process of drawing conclusions about population parameters based on data from a sample.