Chapter FiveHousehold Savings and Investment DecisionsThis chapter contains 28 multiple choice questions, 10 short problems， and 9 longer problems。Multiple Choice1.Getting a professional degree can be evaluated as ________.a) a social security decisionb) an investment in human capitalc) an investment in a consumer durabled) a tax exempt decisionAnswer: （b)2. Suppose you will face a tax rate of 20% before and after retirement. The interest rate is 8%。 You are 30 years before your retirement date and invest $10，000 to a tax deferred retirement plan. If you choose to withdraw the total accumulated amount at retirement， what will you be left with after paying taxes？a) $51,445b) ＄64，000c) $80,501d) ＄100,627Answer： （c)3. Suppose you will face a tax rate of 20％ before and after retirement。 The interest rate is 8％. You are 30 years before your retirement date and have ＄10，000 to invest。 If you invest this in an ordinary savings plan instead of a tax deferred retirement plan， what amount will you have accumulated at retirement? a) $51,445b) ＄64，000c) $80，501d) ＄100，627Answer： (a)4.When your tax rate remains unchanged, the benefit of tax deferral can be summarized in the rule， “deferral earns you ________.”a) the after—tax rate of return before taxb) the pretax rate of return after taxc) the after—tax rate of return after taxd) the pretax rate of return before taxAnswer： （b)5.From an economic perspective， professional training should be undertaken if the ________ exceeds the ________。a) future value of the benefit； present value of the costsb) present value of the benefits; future value of the costsc) future value of the benefits； future value of the costsd) present value of th...
