Economics · Public Finance
In intergovernmental fiscal transfers, which instrument is primarily used to address horizontal fiscal imbalances among regional units?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Ways and Means Advances provided by the central bank
- 2Unconditional equalization grants tied to tax capacity/effort of states✓
- 3Progressive tax system at national level
- 4Specific-purpose grants with matching requirements
Correct answer
Unconditional equalization grants tied to tax capacity/effort of states
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