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(Solved): 4. Does an increase in the marginal cost of tax evasion reduce or increase the amount of tax evasion ...



4. Does an increase in the marginal cost of tax evasion reduce or increase the amount of tax evasion? Illustrate with a diagram to show the effect of an increase in the marginal cost of tax evasion on the amount of unreported (evaded) income per year. (1+3 = 4)



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