Assume that a person earns $600 per day at a certain job.If the marginal tax rate is cut from 40 percent to 30 percent, then this person's after-tax daily earnings will
A)decrease from $240 to $180.
B)increase from $480 to $540.
C)decrease from $540 to $480.
D)increase from $360 to $420.

Question

Quizplus · Accepted Answer

The after-tax earnings increase because the tax rate is reduced. Initially, the person pays 40% of $600, which is $240, leaving $360 after tax. With a 30% tax rate, they pay $180, leaving $420 after tax.

Assume That a Person Earns $600 Per Day at a Certain