The US Sentencing Guidelines Use a "Carrot and Stick" Approach

question 27

Multiple Choice

The US Sentencing Guidelines use a "carrot and stick" approach to managing corporate crime. What is meant by the use of "carrot" and "stick"?

• A) The carrot dangles at the end of the stick as an incentive for organizations to continue to behave ethically.
• B) The carrot refers to the guidelines as "food for thought" and the stick refers to the punishment if the guidelines are not followed.
• C) The carrot refers to incentives in the guidelines to behave ethically and the stick refers to the punishment if the guidelines are not followed.
• D) None of the above.

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Definitions:

Consumption Function

The consumption function is an economic formula that represents the relationship between total consumption and gross national income, predicting consumer spending.

Marginal Propensity to Consume

The ratio of change in consumption to the change in disposable income, indicating how much income will be spent rather than saved.

Investment

Investment involves allocating resources, such as capital or time, in the expectation of generating a profit or benefit in the future.

Interest Rates

A charge, calculated as a percentage of the principal, demanded by a lender from a borrower for assets' usage.