How Can Autonomous Consumption Be Greater Than Zero When Income

question 109

Essay

How can autonomous consumption be greater than zero when income is zero?

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the tax rate that applies to each additional dollar of taxable income.

Average Tax Rate

The percentage of total taxable income that is paid in taxes, calculated by dividing the total tax paid by the total taxable income.

Taxable Income

The portion of income that is subject to taxation after allowances, deductions, and exemptions.

Progressive Taxes

A tax system in which the tax rate increases as the taxable amount increases, meaning higher income individuals pay a higher percentage of their income in taxes.