The proportion of an increase in national income paid in tax is ?
Correct answer: C. the marginal tax propensity
- A. the fiscal stance
- B. the tax multiplier
- C. the marginal tax propensity
- D. the average tax propensity
Explanation
The marginal propensity to tax measures the fraction of an additional unit of income that is paid as tax. It differs from the average tax propensity, which relates total tax to total income.
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