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11 March, 19:36

If a household has $40,000 in taxable income and its tax liability is $20,000, the household's average tax rate is a. 10 percent. b. 25 percent. c. 40 percent.

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  1. 11 March, 23:06
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    50% (not given in the options)

    Explanation:

    The household tax liability is a fraction of the household income. It is computed by applying the tax percentage to the household income.

    Given

    Household income = $40000

    Tax liability (assuming this is same as the tax expense) = $20000

    Average tax percentage = ($20000/$40000) * 100%

    = 50%
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