Which Statement Is Correct with Respect to Marginal and Average

question 122

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

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Definitions:

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The mean quantity of goods ordered in a single transaction or over a set period of time.

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A property owner who does not live on-site and rarely, if ever, visits the property, often relying on management companies for maintenance.