The Branch of Economics Which Studies How Households and Firms

question 82

Multiple Choice

The branch of economics which studies how households and firms interact in markets is called

• A)macroeconomics.
• B)microeconomics.
• C)positive economics.
• D)normative economics.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the rate that applies to each additional dollar of income, important for financial planning and decision-making.

Tax Liability

The total amount of tax owed to the government based on income, asset sales, and other taxable events within a given fiscal period.

Taxable Income

The portion of an individual's or entity's income that is subject to taxation after allowances, exemptions, and deductions.

Tax Liability

The total amount of taxes owed by an individual, corporation, or other entity to tax authorities.