Economics (AS & A Level) · May / June 2025 · Paper 31 · Question 13
9708Government policies to achieve efficient resource allocation and correct market failure
What is an example of 'nudge' theory as applied to the prevention of tax evasion?
- Aemploying an extensive administration to ensure detection of evasion
- Bimposing heavy penalties on those who do evade tax
- Cproviding information to taxpayers about the undesirable effects of tax evasion
- Drequiring employers to inform the tax authorities of workers' pay
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Correct answer: C. providing information to taxpayers about the undesirable effects of tax evasion
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