If Both Spouses of a Married Couple Earn Roughly Equivalent

question 177

True/False

If both spouses of a married couple earn roughly equivalent high levels of wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

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Definitions:

Compound Increase

The growth of an amount where the increase over time accumulates on itself because the base amount changes due to additions made in previous periods.

Compounded Annually

The calculation and addition of interest to the principal once a year.

Nominal Rate

The interest rate before adjustment for inflation, not reflecting the real cost of borrowing or the real return on an investment.

Compounded Monthly

The routine of accruing interest monthly, which incorporates calculating interest on the initial principal as well as on the interest that has previously been accrued.