What Is the Difference Between Nominal and Effective Tax Rates

question 32

Essay

What is the difference between nominal and effective tax rates? What creates the distinction?

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Definitions:

Respondent Conditioning

A learning process that involves creating an association between a naturally occurring stimulus and a previously neutral stimulus.

Shaping

A method of behavior training in which positive reinforcement is used to gradually guide an individual toward a desired behavior.

Positive Reinforcement

A process in behavioral psychology where the introduction of a rewarding stimulus following a desired behavior increases the likelihood of that behavior occurring in the future.

Secondary Reinforcement

A stimulus that gains its reinforcing power through its association with a primary reinforcer, such as praise, tokens, or money.