If the penalties associated with tax evasion are increased and the risk of being caught evading taxes increases,which of the following statements is TRUE,other things held constant?

Question

Quizplus · Accepted Answer

Increasing penalties and the risk of being caught increases the marginal cost of evading taxes, making it more expensive to engage in tax evasion. This would deter individuals from engaging in tax evasion, resulting in a decrease in the occurrence of tax evasion. Therefore, option B is the correct answer.

If the Penalties Associated with Tax Evasion Are Increased and the Risk