The average tax rate is:
A. change in taxes/change in taxable income.
B. total taxes/total taxable income.
C. the sum of the marginal tax rate and the rate of transfer payments.
D. the tax on incremental income less the tax on total income.
Answer: B
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A nation's producers can compete effectively with imports from other nations if it has
a. high wages b. low wages c. low labor cost per unit of output d. less specialization e. low labor productivity
Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger. The U.S. Justice Department concludes the merger will boost the index to 5,500. The antitrust authorities will most likely:
A. ignore this merger because of the relatively small increase in the Herfindahl index. B. allow the merger but watch the new firm carefully for future violations of the antitrust laws. C. allow the merger if foreign entry to the industry is possible. D. prevent the merger, contending that it violates the Clayton Act.