Indy currently earns $50,000 in taxable income and pays $8,000 in taxes. Suppose that Indy faces a marginal tax rate of 25 percent and his boss offers him a raise of $2,000 per year. Indy should:
A. accept the raise because his after-tax income will rise by $1,500.
B. reject the raise because his after-tax income will fall by $3,000.
C. reject the raise because his after-tax income will fall by $4,500.
D. reject the raise because his after-tax income will fall by $6,000.
Answer: A
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The country of Pimm exports $500 billion worth of goods and services and imports $400 billion worth of goods and services. Net interest income paid abroad is $50 billion and net transfers are $0. The current account balance is ________
A) $50 billion B) $100 billion C) $150 billion D) $975 billion
The more that Clayton earns, the higher is his average tax rate. Clayton faces a ________ income tax
A) regressive B) proportional C) progressive D) flat-rate
In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device, all else equal, an increase in the wage differential between high- and low-skill workers leads to
A) an increase in the required minimum share of high-skill workers. B) a decrease in the required minimum share of high-skill workers. C) no change in the required minimum share of high-skill workers. D) None of the above answers are correct.
Differences in income can be accounted for by differences in: a. age
b. education. c. preferences toward leisure. d. all of the above.