The guaranteed transfer income of Angela's family,which consists of her parents and her sister,is $15,000.This implies,if the family earns nothing it will receive a transfer of $15,000.If a negative tax rate of 50 percent is levied,the family's break-even income is:

Question

Quizplus · Accepted Answer

A negative tax rate of 50% means that for every dollar earned, the family loses 50 cents of the transfer. To find the break-even income, set the transfer to zero: $15,000 = 0.5 * Income. Solving gives Income = $30,000.

The Guaranteed Transfer Income of Angela's Family,which Consists of Her