Why Would a Government Issue Revenue Bonds (Which Generally Are

question 58

Multiple Choice

Why would a government issue revenue bonds (which generally are issued at a higher rate of interest than general obligation bonds) even though the government knows that if revenues from the project are not sufficient to cover principal and interest payments, the government will use resources from general government activities to fund the principal and interest payments?

• A) Revenue bonds may not require approval of the voters.
• B) Revenue bonds may not be considered in legal debt limitations.
• C) Revenue bonds may permit the interest costs to be passed on to the users of the services financed.
• D) All of the above.

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