If a household has $40,000 in taxable income and its tax liability is $4,000, the household's average tax rate is
A) 10 percent.
B) 25 percent.
C) 40 percent.
D) 50 percent

Name: If a household has $40,000 in taxable income and its tax liability is $4,000, the household's average tax rate is A) 10 percent. B) 25 percent. C) 40 percent. D) 50 percent
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Question

Quizplus · Accepted Answer

The average tax rate is calculated by dividing the tax liability by the taxable income. Here, $4,000 / $40,000 = 0.10, or 10 percent.

If a Household Has $40,000 in Taxable Income and Its