The Principle of Diversity in the Financial Systems of American

question 11

Multiple Choice

The principle of diversity in the financial systems of American federalism means that

• A)the state government relies most heavily on property taxes for its revenues, whereas the other levels have their own primary revenue sources.
• B)each level of government is, by tradition, free to rely as heavily as it must on any source of revenue.
• C)each level of government is restricted by the U.S.Constitution as to how it may gather revenues.
• D)the national government relies most heavily on the income tax for its revenues, whereas the other levels have their own primary revenue sources.

---

Definitions:

Widespread Costs

Expenses that impact a large sector of the population or numerous aspects of an economy, often relating to public policies or externalities.

Benefits Accrue

The accumulation of advantages or positive results over time from an action or investment.

Purely Competitive

A market structure characterized by many participants offering identical products, where no single buyer or seller can influence the market price.

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, as calculated in economic theory.