Which Statement Is Correct with Respect to Marginal and Average

question 70

Multiple Choice

Which statement is correct with respect to marginal and average tax rates under a progressive tax structure?

• A)At very high levels of taxable income,a taxpayer's marginal and average tax rates will be the same.
• B)For most taxpayers,the average tax rate is larger than the marginal tax rate.
• C)Generalizations cannot be made.The question can only be answered with reference to the tax situation of a specific taxpayer.
• D)At very low levels of taxable income,a taxpayer's marginal and average tax rates will be the same.

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Definitions:

Preconventional Level

The first level of Kohlberg's stages of moral development, where behavior is governed by the consequences of the action and compliance with rules to avoid punishment or gain rewards.

Moral Reasoning

The process of determining what is right or wrong in a specific situation, based on ethical principles, values, and beliefs.

Lawrence Kohlberg

A psychologist known for his theory of moral development, which outlines how ethical reasoning and morality evolve throughout different stages of human life.

Cognitive Development

The process by which individuals acquire and understand knowledge, form concepts, solve problems, and gain insights.