Jenny Spends 32 Hours a Week, 50 Weeks a Year

question 53

Multiple Choice

Jenny spends 32 hours a week, 50 weeks a year, operating a bicycle rental store that she owns at a resort community. She also owns a music store in another city that is operated by a full-time employee. Jenny spends 140 hours per year working at the music store. She elects not to group them together as a single activity under the "appropriate economic unit" standard.

• A) Neither store is a passive activity.
• B) Both stores are passive activities.
• C) Only the bicycle rental store is a passive activity.
• D) Only the music store is a passive activity.
• E) None of the above.

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Definitions:

Welfare Dependency

A situation where individuals or families rely extensively on government assistance programs for their income over long periods.

Poverty Rate

The percentage of the population living below the national poverty line, which measures the minimum income level required to meet basic living needs.

Lower Three Quintiles

The bottom 60% of the population when divided by income or wealth, often used in analyses of income distribution.

Income

The monetary payment received by an individual or household for labor, investment, or other sources over a specific period.