If a Tax System Is Progressive, Then

question 183

Multiple Choice

If a tax system is progressive, then

• A) the average and the marginal tax rates are equal.
• B) the marginal tax rate is greater than the average tax rate as income rises.
• C) the marginal tax rate is lower than the average tax rate as income rises.
• D) the average tax rate is constant, but the dollar amount paid in taxes increases as income increases.

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Definitions:

Self-serving Bias

A cognitive bias where individuals attribute their successes to internal factors and failures to external factors.

In-group/out-group Bias

Describes the tendency to favor members of one's own group (the in-group) over those from different groups (the out-group), often leading to prejudice and discrimination.

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of situational factors.

Situational Causes

External environmental factors or conditions that influence an individual's behavior or outcomes, as opposed to intrinsic or internal factors.