Consider an individual who earns $95,000, has two children, pays $6,000 in child care expenses for one child, pays $19,000 in college tuition for the other child, pays $6,500 in mortgage interest (mortgage interest is tax deductible), and pays $9,600 in medical expenses. Medical expenses in excess of 7.5 percent of one's income are deductible. Personal exemptions are $3,050 per person (including the tax filer). When the individual's income is $30,000 or above, he/she gets a 12% child care credit. A college credit of 9% of tuition costs is given to those that have income less than $90,000. Her statutory marginal tax rate is 15 percent. What is her actual or effective marginal tax rate?
What will be an ideal response?
Final taxes owed are $10,811.25, making the effective tax rate 11.38%.
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A change that increases the expected profit from holding a unit of product in inventory, ________ the expected marginal revenue curve and ________ the profit-maximizing quantity to hold in inventory.
A) increases; decreases B) decreases; increases C) increases; increases D) decreases; decreases
The effect of a shift in the aggregate demand curve due to an increase in consumer confidence will be:
A. an increase in both prices and output in the short run. B. a decrease in prices only in the long run; output will remain the same. C. a decrease in both prices and output in the short run. D. an increase in output only in the long run; prices will remain the same.
A decline in household income that sets off a multiplier process causes
A. An increase in AD. B. A decrease in AS. C. A decrease in AD. D. An increase in AS.
Which of the following is NOT a possible solution to the problem of pollution?
A) subsidizing the costs of production of activities that generate pollution B) converting a resource that is communally owned into a privately owned resource C) regulating the quantity of pollution that can be generated D) imposing a pollution tax on producers