What is the difference between marginal and average tax rates? Under what marginal and average tax rate conditions would an income tax be progressive?
What will be an ideal response?
Marginal tax rates are the percentage of any additional income that will have to be paid in tax while average tax rates are the total amount of tax divided by income. If marginal tax rates are higher than average tax rates, the income tax is progressive.
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Fears of an impending civil war in Baltonia have reduced the confidence of potential investors. Assuming all else equal, which of the following is likely to happen in this case?
A) The consumption expenditure in Baltonia will rise. B) The equilibrium real wage in Baltonia will rise. C) The supply of labor in Baltonia will fall. D) The demand for labor in Baltonia will fall.
The production possibilities curve shows different combinations of goods that:
a. can be consumed by households. b. can be consumed by firms. c. can be produced with the available technology. d. are produced and consumed by firms. e. are bought and sold in the market.
John paints the exterior of his house and, as a result, his neighbor Christine is able to sell her home for $5,000 more than she could have before. John's house painting:
a. creates a negative externality for Christine. b. shows John is a free rider. c. results in an efficient market outcome for both. d. creates a positive externality for Christine. e. was poorly done.
If Macroland's first Prime Bank has deposits of $35,000 and makes the maximum possible loans of $50,000 allowed, then Macroland's legal reserve requirement must be 17.5 percent
Indicate whether the statement is true or false