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:

Sample Size

The number of observations or data points collected in a sample from a population for the purpose of statistical analysis.

Confidence Interval

A range of values, derived from sample data, that likely contain the population parameter with a certain level of confidence.

Level of Confidence

The degree of certainty or probability that the results of statistical analysis are reliable and not due to random chance.

Confidence Interval

A range of values derived from sample data that is likely to contain the value of an unknown population parameter, expressed at a given level of confidence.