Suppose the tax amount on the first $10,000 income is $0; $2000 on the next $20,000; $4000 on the next $20,000; $6000 on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $30,000 and Family B has income of $80,000 What is the marginal and average tax rate for each family?
A) Family A: marginal—10 percent; average—6.7 percent; Family B: marginal—30 percent; average—15 percent.
B) Family A: marginal—10 percent; average—20 percent; Family B: marginal—30 percent; average—23 percent.
C) Family A: marginal—10 percent; average—10 percent; Family B: marginal—40 percent; average—40 percent.
D) Family A: marginal—10 percent; average—15 percent; Family B: marginal—40 percent; average—20 percent.
A
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An economy's standard of living grows over the long run because of: a. better protection of domestic industries from foreign competition. b. centralized planning and decision making
c. technological improvements. d. stringent foreign trade policies. e. high growth rate of population.
Which of the following would lead to a rightward movement along a stationary money demand curve?
a. A decrease in the interest rate b. A decrease in the price level c. An increase in the interest rate d. An increase in the price level e. An increase in real income