A Husband and Wife Make a Gift of Their Jointly

question 123

True/False

A husband and wife make a gift of their jointly owned vacation home to their adult children. The gift-splitting election must be made.

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Definitions:

Budget Line

A visual depiction showing all the different pairs of two products that can be bought within a certain budget at particular price levels.

Market Baskets

A set of goods or services used as a standard for comparing purchasing power or cost of living in different locations.

Completeness

In economics, completeness refers to a property of preferences indicating that any two bundles of goods can be compared, allowing for decisions on which is preferred or if they are equally desirable.

Transitivity

A principle in decision making that if option A is preferred over B, and B is preferred over C, then A should be preferred over C.