Related to the Economics in Practice on page 393: Refer to Table 19.4. At an income level of $10,000, the average tax rate is

A) 1%.
B) 5%.
C) 10%.
D) 20%.

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by the total income.

Total Income

The sum of all earnings obtained from any source, including wages, rental income, profits, dividends, and interest.

Total Taxes

The cumulative amount of taxes paid by individuals or companies to the government, including federal, state, and local taxes.