Which of the Following Statements Is False with Respect to Marginal

question 55

Multiple Choice

Which of the following statements is false with respect to marginal and average tax rates?

• A)For most taxpayers,the average rate is larger than the marginal rate.
• B)For taxable income greater than the lowest tax bracket,the average rate is always greater than the lowest marginal rate and less than the highest marginal rate.
• C)The average rate is the percentage of tax paid on the entire amount of taxable income.
• D)The marginal rate is the proportion of tax paid on the next dollar of taxable income.

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Definitions:

Assets

Resources owned by a business, expected to bring future economic benefits.

Liabilities

Debts or financial responsibilities that a business has to other entities, requiring repayment over a period through the exchange of economic resources such as cash, products, or services.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, essentially representing the owner's claim against the company's assets.

Expense

The outflow of resources such as cash and other valuables, incurred in the process of generating revenues.