In the theory of tax evasion,increasing the risk of getting caught _____ the marginal cost of tax evasion; reducing the penalty associated with tax evasion _____ the marginal _____ of tax evasion.

Question

Quizplus · Accepted Answer

Increasing the risk of getting caught increases the marginal cost of tax evasion because it makes evasion more risky. Reducing the penalty decreases the marginal cost of tax evasion because the consequences are less severe.

In the Theory of Tax Evasion,increasing the Risk of Getting