The percentage of total income which the government takes away in the form of income tax is known as :
“Average tax rate” equals 100×T(Y)/Y, the share of total income paid in tax. “Total tax” is T(Y), an amount; “Marginal tax” is additional tax; “Marginal tax rate” is dT/dY,…
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The percentage of total income which the government takes away in the form of income tax is known as :
Answer and explanation
Correct answer B
“Average tax rate” equals 100×T(Y)/Y, the share of total income paid in tax. “Total tax” is T(Y), an amount; “Marginal tax” is additional tax; “Marginal tax rate” is dT/dY, the rate on an extra unit of income.
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UGC NET Economics