Fiscal Federalism Can Be Argued to Be Important in a Common

Multiple Choice

Fiscal federalism can be argued to be important in a common currency area because

A) it is likely that some member countries of the common currency area will have larger populations than others.
B) fiscal policy is needed to stabilize the economy of any of the member countries of the common currency area if and when a member country is affected by an asymmetric macroeconomic shock.
C) fiscal policy is a controversial issue.
D) central banks cannot be given responsibility for fiscal policy