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Imagine two students who both get a D on an important exam in a psychology class.One of them decides to study much harder,and on the next test she gets a significantly better grade.The other student concludes that he just isn't smart enough to do well in this class and,not surprisingly,he gets another D on the next exam.Even though both students were exposed to the same occurrence (both got a D on the first exam) ,their subsequent behaviours were very different as a result of their different thoughts and expectations.This example best illustrates the approach of which of the following?
Average Tax Rate
The ratio of the total amount of taxes paid to the total taxable income, indicating the portion of income that is paid in taxes.
Marginal Tax Rate
The tax rate that applies to the last dollar of the taxpayer's income, indicating the percentage of tax paid on any additional income earned.
Taxable Income
The portion of an individual or entity's income used as the basis to calculate how much the individual or entity owes in taxes.
Average Tax Rate
The proportion of total taxable income that individuals or corporations pay in taxes, calculated by dividing the total tax amount by the total income.
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