What Is the Purpose of Block Grants or Federal Aid

question 31

Multiple Choice

What is the purpose of block grants or federal aid given to state or local governments?

• A) It is to be divided into discrete "blocks" of grants, each limited to $100 million.
• B) It is to be spent on a specific policy area decided on by the federal, state, and local governments.
• C) It is to be spent in the way the state or local government decides to spend it.
• D) It is to be tied to federal mandates that state or local governments must then implement or they will be taxed on the money.
• E) It is to be contingent on state/local endorsement of so-called "social" federal legislation.

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Definitions:

Compounded Annually

Interest calculated on the initial principal and the accumulated interest from the past year added together once per year.

Term Deposit

A type of bank deposit that has a fixed term and typically offers a higher interest rate than a regular savings account.

Interest Rate

The percentage of a sum of money charged for its use.

Original Principal

The initial amount of money borrowed or invested before any interest or earnings are applied.