Question

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

Answer 1

Option C.

• In most developing countries, an effective fiscal policy is harder to conduct because taxes are difficult to collect.
• Developing countries may contain poor people in higher numbers with poor HealthCare, education, employment levels.
• Imposing taxes from them is not a good idea for conducting a fiscal policy.
• Developing nation's also lack the infrastructure and technology that can help the government in collecting the taxes from the people residing there.