EBK PRINCIPLES OF MICROECONOMICS
EBK PRINCIPLES OF MICROECONOMICS
7th Edition
ISBN: 9781305892811
Author: Mankiw
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 16, Problem 3QR
To determine

Long-run equilibrium ina monopolistically competitive market.

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Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.
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