assume that Christiana loans $200,000 to Max, her son, to start a business (income- producing property). Christiana does not charge interest because Max needs the funds to operate a struggling startup business. Why should Christiana be required to pay tax on the interest she did not collect? On one hand, she received no interest income. On the other hand, interest would have been charged by Christiana in an arm's length loan made to any other borrower or by any other lender on a loan to Max. Christiana's choice not to charge interest is really an indirect gift to Max. Should Christiana be able to avoid tax on the income she assigned to Max? This type of income is sometimes referred to as "phantom" income.

1. all other things equal, according to the law of demand, when the price of a good falls, the demand for the good falls the demand for the good rises the quantity demanded of the good falls the quantity demanded of the good rises 2. when a market is in equilibrium, the quantity of the good that buyers are willing and able to buy exactly equals the quantity that sellers are willing and able to sell cannot be determined is less than the quantity that sellers are willing and able to sell is greater than the quantity that sellers are willing and able to sell 3. which of the following factors does not influence the demand for a good or service? consumer (buyer) income the price of related goods the number of sellers buyer expectations 4. when the number of sellers in a market increases, demand rises supply rises the price rises, all else equal the number of buyers falls