ECO - 252 - Macroeconomics

5. Classify each of the following as employed, unemployed, or not in the labor force.

a. The government decides to increase the minimum wage. Kirk loses his job as a result and reads through the classifieds for employment offers.

b. The Wildflour, a local bakery, experiences a decrease in sales caused by a slowing down of the economy. Due to the decrease in sales, the bakery lays off their assistant baker, John. John decides to enroll full time in a culinary school to learn new skills.

c. Sharon spent the last 13 years raising her children but she is now ready to go back to work. She started to look for a job but has not found anything yet.

d. Tao is looking for a job. He turned down a couple of offers because they did not let him use the skills he has recently acquired.

e. Alice was laid off from her job at the auto plant because a recession reduced the demand for cars. She immediately starts looking for a job but to keep busy she spends more time volunteering at her local church.

f. Karen, a software engineer, lost her job when the start-up company she was working for went bankrupt. She interviewed at five companies but was not called back. As a result she gave up looking for a job.

g. Jonathan currently works at the Federal Reserve Bank in Kansas City, but has no prospect of being promoted. He begins a job search and is called in his Kansas City office by Boeing based in Seattle.

Please Complete the federal tax return below for 2016. Use Form 1040, Schedule A, Schedule B, and Form 2441 to complete this return. You can print these forms off of the IRS website by going to irs.gov and searching for the forms. Take a screenshot of each form. Please only answer if you have the completed forms...........Lucy and Ricky Van have one child, Leroy, who is 5 years old. The Vans reside at 1234 Huckleberry Street, Kathleen, GA 31047. Ricky’s Social Security number is 577-11-3322, Lucy’s is 477-98-4735, and Leroy’s is 589-22-1142. Lucy and Ricky’s earnings and withholdings are: Ricky: Earnings from Dell Company (office manager) $30,000 Federal Income Tax withheld $3,000 State Income Tax withheld $1,200 Lucy: Earnings from Rite Aid (Pharmacy Tech) $24,000 Federal Income Tax withheld$2,500 State Income Tax withheld$800 The other income includes interest from BB&T Savings of $1,600. Other information and expenditures are: Interest: On home mortgage$12,000 Credit card$1,000 Taxes: Property Tax on personal residence $1,600 State income tax paid for previous year$300 Contribution to church$500 Medical insurance premiums$500 Medical and dental expenses$3,000 Income tax preparation fee paid$200 Payment of union dues$250 Child Care for Leroy$3,600 CGTC Childcare Development Center

Part1

Margen is single and has taxable income before the QBI deduction of $173,300. Margen owns a sole proprietorship (not a professional service) that produced net ordinary income of $180,000 and subject to self-employment tax of $21,300. The business paid total W-2 wages of $74,000 and the total unadjusted basis of prop­erty held by the business is $120,000. How much is Margen’s QBI deduction?

Part2

a. Mourezky gave some long-term real estate to a church. The property was worth $33,000 and had a basis of $10,000.   Mourezky’s adjusted gross income was $60,000 and Mourezky made cash contributions of $9,000. How much is Mourezky’s charitable deduction?

b. Casey made several contributions to Casey’s alma mater during the current year as follows:

Cash                                                                                                        $ 4,200

A painting that Casey has owned five years for display

in the library (basis, $1,280), FMV                                                9,500

Stock held for 10 months as an investment (basis, $900), FMV                                                                                                                       1,200

Assuming Casey’s AGI is $30,000, how much is Casey’s charitable contribution deduction?

Part3

Josephine is single and paid the following taxes during 2020:

State income taxes withheld from wages                                 $ 4,375

Refund of 2019 state income taxes                                                     - 45

State and local sales taxes paid                                                         3,125

State and local real property taxes paid                                        5,275

State auto registration ($375 was based on the value)               525

How much is Josephine’s federal deduction for state and local taxes?

Please refer to the USA. irs.gov for any refernce

Form 1040. William A. Gregg, a high school educator, and Mary W. Gregg, a microbiologist, are married and file a joint income tax return for 2019. Neither William nor Mary is over 50 years old, and both have excellent sight. They provide the sole support of their three children: Barry, Kimberly, and Rachel (all under age 17). The following information is from their records for 2019:

salaries and wages, William. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,000

Federal income tax withheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Salaries and wages, Mary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000

Federal income tax withheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
Interest income—Home Savings and Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 690

Interest income—City Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

Tax-exempt interest income—State of Texas Bonds . . . . . . . . . . . . . . . . . . . . . . 1,400
Itemized deductions as follows:

Hospitalization insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320
Unreimbursed fees of doctors, hospitals, etc. . . . . . . . . . . . . . . . . . . . . . . . . 740

Unreimbursed prescription drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
Real estate taxes on residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,300

State income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,700
State sales taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720

Interest paid on original home mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . .18,430
Charitable contribution—Faith Church. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000

Charitable contribution—State University. . . . . . . . . . . . . . . . . . . . . . . . . . . .200
Quarterly estimated federal taxes paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500

Calculate the 2019 Federal income tax and the tax due (or refund) for the Greggs assuming they file a joint return. Form 1040, along with Schedules A and B, may be completed. Supply fictitious information for the address and Social Security numbers. (Note: Use 2019 tax forms since the 2020 forms may not be available.)

Other things the same, if the exchange rate changes from 30 Thai bhat per dollar to 25 Thai bhat per dollar, then the dollar has

6. Changes in taxes

The following graph shows the aggregate demand curve.

Shift the aggregate demand curve on the graph to show the impact of a tax cut.

Suppose the governments of two different economies, economy X and economy Y, implement a permanent tax cut of the same size. The marginal propensity to consume (MPC) in economy X is 0.75 and the MPC in economy Y is 0.8. The economies are identical in all other respects.

The tax cut will have a larger impact on aggregate demand in the economy with the (larger MPC/ smaller MPC)

1.) A physician changes the battery for a single chamber permanent pacemaker pulse generator inserted one year-ago and repairs (and reconnects) the existing transvenous lead. How should these services be reported?

2.) Immediately prior to performing a single coronary artery bypass graft procedure, the same physician harvested a vein from the left arm to be used for the graft. What add-on, if any, would be reported for the harvesting of the vein?

3.) A physician performed a coronary artery bypass graft procedure involving two grafts – a venous graft to the right coronary artery and a separate venous graft to the left anterior descending artery. How should these services be reported?