Economics (AS & A Level) · May / June 2025 · Paper 34 · Question 8
9708Government policies to achieve efficient resource allocation and correct market failure
A government wishes to discourage tax avoidance. Which policy to achieve this would be an example of the behavioural approach of nudge theory?
- Acompelling direct tax deduction by employers
- Bmaking random inspections of individual tax records
- Cproviding information on how the tax is spent by the government
- Dusing penalties such as fines and imprisonment for tax avoidance
As printed in the paper
Show the answer
Correct answer: C. providing information on how the tax is spent by the government
Sit this whole paper →More on Government policies to achieve efficient resource allocation and correct market failure
Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.