An Example of HORIZONTAL IMBALANCE in Terms of Own Source

question 3

Multiple Choice

An example of HORIZONTAL IMBALANCE in terms of own source funding at lower levels of government is:

• A) when the federal government has more money at its disposal than state governments
• B) when the state governments have more money than local governments
• C) when the federal government takes away funds but requires that service continue to be provided
• D) when various schools across the same state have unequal funding

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Definitions:

Annually Compounded

The process where interest is calculated on both the initial principal and the accumulated interest over the year.

Fair Market Value

A price established by competitive bidding among many buyers and sellers.

Compounded Monthly

Refers to the calculation of interest where the amount earned or paid is added to the principal balance each month, causing future interest calculations to be based on the increased balance.

Perpetuity

A type of annuity that receives an infinite series of identical cash flows.