CA Foundation P4 · Chapter 7 · Question 1 of 15
According to Richard Musgrave, the three fiscal functions of the government are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Allocation, distribution and stabilisation
Explanation
Musgrave classified government's fiscal functions as the allocation function (providing goods markets fail to supply efficiently), the distribution function (achieving a fair distribution of income) and the stabilisation function (maintaining employment and price stability).
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