If the Marginal Tax Rate Is Equal to the Average

question 60

Multiple Choice

If the marginal tax rate is equal to the average tax rate as taxable income increases, the tax structure is

• A)regressive.
• B)proportional.
• C)progressive.
• D)unfair.

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Definitions:

Compounded Semiannually

Refers to the process of applying interest to a principal sum twice a year, resulting in an increase in the amount of interest earned or paid.

Semiannual

Occurring twice a year; pertaining to a period of six months.

Interest Earn

The income received by an investor for lending funds or depositing money in interest-bearing accounts.

Compounded Monthly

This refers to the process where interest is added to the principal balance of a loan or deposit on a monthly basis, allowing the interest to earn interest in subsequent months.