Which of the Following Statements Is True with Respect to Marginal

question 21

Multiple Choice

Which of the following statements is true with respect to marginal and average tax rates under a progressive tax structure?

• A)Marginal rates are always larger than average rates.
• B)Marginal rates are always smaller than average rates.
• C)Average rates can only be calculated for taxpayers with income over $100,000.
• D)Average rates are never more than marginal rates.

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Definitions:

Financial Statements

Reports that provide information about a company's financial condition including income, expenses, and net worth.

Current Ratio

A financial ratio that measures a company's ability to pay short-term obligations using its short-term assets.

Current Assets

Assets expected to be converted into cash, sold, or consumed within one year or in the normal operating cycle of the business, whichever is longer.

Current Liabilities

Financial obligations a company is due to pay within one year or within its normal operating cycle if longer.