EBK STUDY GUIDE FOR MANKIW'S PRINCIPLES
7th Edition
ISBN: 9781337509848
Author: Mankiw
Publisher: VST
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Chapter 22, Problem 1PA
Subpart (a):
To determine
Identifying principal and agent in the problem of moral hazard.
Subpart (b):
To determine
Identifying principal and agent in the problem of moral hazard.
Subpart (c):
To determine
Identifying principal and agent in the problem of moral hazard.
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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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Chapter 22 Solutions
EBK STUDY GUIDE FOR MANKIW'S PRINCIPLES
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