Question

The McDougall Rule, in the context of public finance, primarily suggests that:

Q: Answer-The McDougall Rule, in the context of public finance, primarily suggests that:

The McDougall Rule, in public finance, primarily suggests that the spatial distribution of public expenditure should aim to equalize marginal social benefits across different regions, considering differing needs and costs. This rule advocates for an allocation of public funds that maximizes overall welfare by ensuring that the last unit of expenditure in each region yields the same social benefit.

A Government spending should always be less than government revenue to avoid fiscal deficits.

B Public goods should only be provided if their social benefits exceed their social costs, regardless of who pays.

C The spatial distribution of public expenditure should aim to equalize marginal social benefits across different regions, considering differing needs and costs.

D Taxation should be progressive, ensuring that higher-income individuals contribute a larger proportion of their income to government revenue.

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