The central economic problem of fiscal federalism is:

Question

Quizplus · Accepted Answer

Fiscal federalism is concerned with the proper division of roles and responsibilities between different levels of government regarding taxation and spending. The central economic problem in fiscal federalism is how to ensure an efficient and effective allocation of resources between different levels of government, taking into account the different needs and preferences of the various regions or states. This requires a careful balancing of the benefits of centralized decision-making and the costs of decentralization, as well as a consideration of factors such as economies of scale, intergovernmental transfers, and income redistribution. Therefore, option A is the correct choice.

The Central Economic Problem of Fiscal Federalism Is