Which of the following fiscal functions primarily deals with correcting inefficiencies caused by market failure?

CA Foundation · Business Economics · MTP · May 2026
Which of the following fiscal functions primarily deals with correcting inefficiencies caused by market failure?
(A) A. Stabilization function
(B) B. Allocation function
(C) C. Redistribution function
(D) D. Debt management

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Allocation function

Topics: Public Finance

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