The concept of fiscal illusion refers to a situation where:
Type: MCQ • Marks: 1
The concept of fiscal illusion refers to a situation where:
Options
A. Citizens perfectly understand the full cost of government programmes
B. Budget documents are always inaccurate
C. Government completely eliminates taxation
D. The perceived cost of public services differs from their actual economic or tax cost
Explanation
Fiscal illusion occurs when institutional arrangements, borrowing, indirect taxation or complex financing obscure the true cost of government services from citizens.
UPSC Principal & Vice PrincipalManagement Finance Administration
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