In contrast to a traditional IRA, contributions to a Roth IRA are not tax-deductible. However, withdrawals are tax-free
Can you think of any reason why someone might wish to use this type of IRA over a traditional IRA that allows tax deductible contributions? Compare and contrast the motivations that would lead to people to invest in either of them.
Those who contribute to Roth IRAs probably believe that they will be in higher tax rates when then retire. In contrast those who invest in traditional IRAs prefer the tax deductibility during their working years because they believe they will be in a lower tax bracket during retirement.
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Marginal utility can be
A) positive. B) negative. C) zero. D) positive, negative, or zero.
In the simple circular flow model containing just households and business firms, the entire product flows to ________ in exchange for ________
A) business firms, labor services B) business firms, wages C) households, consumer expenditures D) households, labor services
How does imperfect information affect market decisions?
a. It doesn't, because information is generally excellent. b. It leads to inefficient outcomes in which expected benefits and actual benefits diverge. c. It leads to wasteful attempts to improve information. d. It leads to exploitation of sellers by buyers.
Fiscal policy is
a. the deliberate control of the money supply to achieve macroeconomic goals. b. the use of the government's regulatory powers to improve economic efficiency. c. the operation of business enterprises by the government. d. the use of government taxation and expenditures to achieve macroeconomic goals.