In most developing countries, an effective fiscal policy is:
A)easier to conduct than in developed economies, because there are fewer institutional checks and balances.
B)easier to conduct than in developed economies, because politicians tend to be more socially-minded.
C)harder to conduct, because taxes are difficult to collect.
D)harder to conduct, because fiscal policy is discretionary in developing countries, unlike developed countries.

Question

Quizplus · Accepted Answer

C) Fiscal policy in developing countries often faces challenges due to difficulties in tax collection. This can stem from a larger informal sector, less efficient tax administration, and lower compliance rates, making it harder to mobilize domestic resources for public spending and investment.

In Most Developing Countries, an Effective Fiscal Policy Is