Assume That Peter Is a Single Parent Who Is in Poverty

question 47

Multiple Choice

Assume that Peter is a single parent who is in poverty. He receives food stamps and Medicaid. For every $100 that he earns, Peter loses $35 of his food stamp benefits and $20 in his Medicaid benefits. Also, Peter's income is taxed at a rate of 10 percent. Then, Peter's effective marginal tax rate is

• A) 45 percent.
• B) 55 percent.
• C) 65 percent.
• D) 70 percent.

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Definitions:

Two-Way ANOVA

A statistical method employed to assess the impact of two categorical independent variables on a dependent variable that is continuous.

Levels

Distinct values or categories that a qualitative variable can take, often used in the context of experimental design and analysis.

Independent SRSs

Independent Simple Random Samples; a sampling technique where each subset of the population has an equal probability of being chosen, and the selections are made independently of each other.

Normally Distributed

Describing a data set where the observations are symmetrically distributed around the mean, forming a bell-shaped curve.