Suppose You Are Paid a Wage of $50 Per Hour

question 9

Multiple Choice

Suppose you are paid a wage of $50 per hour.If your marginal income tax rate is 20%,then for every additional hour you work,your tax wedge is

• A) $10.
• B) $20.
• C) $25.
• D) $40.

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Definitions:

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a regular basis.

Corporate Dividend Payout

The part of a company's profits paid out to shareholders as dividends.

Reinvesting Dividends

The process of using dividend payments to purchase more shares of the same stock.

Declaration Date

The date on which a company's board of directors announces its next dividend payment.