Multiple Choice When a borrower such as a homeowner makes a monthly payment on their loan, the bank splits up this payment as follows: Total Payment=Interest + Principal. Payment to which component(s) is(are) applied to reduce the household's debt? Interest a. b. Principal Both c. Neither d. One-half of each In the context of the Federal Income Tax Form 1040, given that the amount of itemized deductions exceeds the standard deduction, every additional dollar of itemized deductions reduces taxable income by more than one dollar reduces taxable income, but by less than one dollar. reduces taxable income by exactly one dollar. does not reduce taxable income at all. reduces the tax liability by exactly one dollar. c b. Which of the following does not represent an example of an itemized deduction? a property taxes on your home charitable contributions I interest on credit card balances interest on your home mortgage e all of the above are examples of itemized deductions . d