Final answer:
The correct answer is option c. The three basic fiscal constraints are budgetary, legal, and programmatic. Policymaking in the fiscal arena contends with lag times and must navigate legal and political challenges.
Step-by-step explanation:
The three basic fiscal constraints appropriated funds are subjected to are budgetary, legal, and programmatic. Fiscal policy decisions are often influenced by various factors, including resources available (budgetary constraints), the legal frameworks and laws that dictate how funds can be allocated or spent (legal constraints), and the objectives or goals set by the program or organization itself (programmatic constraints). These three constraints work together to ensure that fiscal policies are implemented within the confines of the law, align with the organization's strategic directions, and conform to budget limitations.
Fiscal policy is interconnected with monetary policy as both aim to steer the economy towards stability and growth. However, implementing such policies face challenges, such as lag times which include recognition lag, implementation lag, and impact lag, complicating the timing and efficacy of economic interventions. Furthermore, there are legal challenges in terms of adhering to regulations and statutes, and political challenges concerning political support and public opinion that may affect decision-making.