Which, If Any, of the Following Provisions of the Tax

question 180

Multiple Choice

Which, if any, of the following provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS) ?

• A)Penalties are imposed for failure to file a return or pay a tax on time.
• B)Prepaid income is taxed in the year received and not in the year earned.
• C)Annual adjustments for indexation increases the amount of the standard deduction allowed.
• D)Casualty losses must exceed 10% of AGI to be deductible.
• E)A deduction is allowed for charitable contributions.

Calculate the maximum new loans a bank can extend based on its excess reserves.

Analyze the impact of Federal Reserve actions on the money supply.

Identify the components of a bank’s reserves.

Understand the relationship between the price of government bonds and market interest rates.

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Definitions:

Bearer Paper

A negotiable instrument that is payable to whoever holds or presents it for payment.

Negotiable

Capable of being discussed or modified in terms of the conditions of an agreement or contract.

Order Paper

A negotiable instrument or financial document that is payable to a specific individual or the order of a specific person.

Blank Indorsement

An endorsement on a financial instrument, such as a check, that specifies no endorsee, making it payable to the bearer.