Answer the following statements true (T) or false (F)
1. In the Current Model, investment earnings are taxed as they are earned.
2. In the Deferred Model, investment earnings are taxed at the end of the investment period.
3. In the Exempt Model, the earnings are excluded from explicit taxation.
4. In the Pension Model, the initial investment is deductible or excludible from gross income, and investment earnings are taxed currently.
1. TRUE
In the Current Model, after-tax dollars are invested, and the earnings are taxed annually.
2. TRUE
In the Deferred Model, after-tax dollars are invested, but earnings are not taxed until the end of the investment period.
3. TRUE
In the Exempt Model, the earnings are never taxed.
4. FALSE
The initial investment is deductible or excludible from gross income, and investment earnings are taxed at the end of the investment period.
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