If Olivia's income increases from $40,000 to $50,000 and her tax liability increases from $6,000 to $9,000, which of the following is true?
a. Her marginal tax rate is 18 percent in this range.
b. Her marginal tax rate is 30 percent in this range.
c. Her average tax rate was 22.5 percent when her income was $40,000.
d. The tax structure must be regressive in the range between $40,000 and $50,000.
B
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Fiscal policy during periods of relatively low unemployment and low inflation have
A) little effect due to time lags and the crowding-out effect. B) significant effect due to the timely intervention of the president and congress. C) significant effect because the changes in fiscal policy gives investors confidence in the economy. D) little effect because the global market makes up fifty percent of aggregate spending.
In the simple Keynesian aggregate expenditure model, the equilibrium level of disposable income is achieved when:
a. the employment rate is equal to the labor force participation rate. b. saving equals investment c. aggregate expenditures exceed output. d. aggregate expenditures are equal to real disposable income.