MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 3, Problem 2SQ

Which of the following would not cause market demand for a normal good to decline?

  1. a. An increase in the price of a substitute
  2. b. An increase in the price of a complement
  3. c. A decline in consumer income
  4. d. Consumer expectations that the good will go on sale in the near future
  5. e. An announcement by the Surgeon General that the product contributes to premature death
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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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