Suppose the government taxes 10 percent of the first $30,000 in income and 20 percent of all income over $30,000 . Calculate the marginal tax rate and the average tax rate for a person who earns $70,000
The marginal tax rate would be 20 percent because the person earns more than $30,000 . The average tax rate would be 15.7%. The person pays $3,000 on the first $30,000 of income and $8,000 on the remaining $40,000 of income. $11,000/$70,000=15.7%.
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When a firm is experiencing diseconomies of scale, it should
A. expect its average total cost to increase if it reduces the scale of its operations. B. expect its average total cost to decrease if it reduces the scale of its operations. C. lower its price to attract new consumers. D. expect its average total cost to remain unchanged if it changes the scale of its operations.
Assuming a simple Keynesian multiplier, and given an increase in planned investment of $100 billion, the effect on total output will be greater than $100 billion only if the
A) MPS is greater than zero. B) MPC is zero. C) MPS is less than zero. D) MPC is greater than one.
The median voter model predicts that candidate will do all the following, except:
a. label his or her opponents ad extremists b. adjust his or her positions in response to polls c. speak in specific rather than general terms d. aim for a middle-of-the-road position
Time to maturity refers to the amount of time until
A. a bond can be sold on the secondary market. B. an asset pays interest for the first time. C. an asset repays the principal to an investor. D. the yield curve shows an upward slope.