Which of the following is the marginal tax rate?
A. The fraction of each additional dollar of income that must be paid in taxes.
B. The total tax paid divided by total income.
C. The tax rate paid by the average taxpayer.
A. The fraction of each additional dollar of income that must be paid in taxes.
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Under a fixed exchange rate system, at low domestic real interest rates net capital outflows are ________, so the central bank ________ foreign-exchange reserves
A) positive; acquires B) positive; loses C) negative; acquires D) negative; loses
Consider a world of two countries facing opportunity costs and producing only wheat and cloth. In one hour, residents of Country A can produce a maximum of either 1 unit of wheat or 0.5 unit of cloth, whereas residents of Country B can produce a maximum
of either 0.3 unit of wheat or 0.4 unit of cloth. Country B should export A) wheat and cloth; country A should not export anything. B) wheat and country A should export cloth. C) nothing and country A should export both wheat and cloth. D) cloth and country A should export wheat.