Discussion Forum : Fiscal And Monetary Policy
Question - Which of the following is a problem for fiscal policy in a currency union ?
Options:
A .  The central bank controls interest rates on long-term bonds issued by the governments of the member countries of the currency union
B .  Government of the member countries of the currency union may run large budget deficit and so crowd out private investment
C .  government of the member countries of the currency union may run large budget deficits and so impose costs on other countries by pushing up interest r
D .  It is difficult to raise enough tax revenue to pay for the operation of the currency union
Answer: Option C
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
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