Identify the Statement Below That Is False

question 21

Multiple Choice

Identify the statement below that is false.

• A)If an employer is not required to withhold income taxes from an employee's wages, the wages are not taxable to the employee.
• B)In certain situations, income tax withholding by an employer is voluntary.
• C)An employer must deposit with the government an amount of FICA tax that is more than twice the amount withheld from the employee's salary (i.e., the employee's and employer's shares).
• D)If an excess amount of FICA has been withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return.
• E)None of the above.

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Definitions:

GDP Deflator

The GDP Deflator is a measure of the price level of all domestically produced goods and services in a country, used to adjust nominal GDP to real GDP.

Nominal Interest Rate

The percentage increase in money you pay the lender for the use of the money you borrowed, not adjusted for inflation.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of borrowing and the real yield on savings.

Purchasing Power

The value of a currency expressed in terms of the quantity of goods or services that one unit of money can buy, often influenced by inflation.