Block Grants Are Designed to

question 42

Multiple Choice

Block grants are designed to

• A) fund a large number of similar projects.
• B) fund urban improvements on a specific city block.
• C) give the states considerable discretion in how the money should be spent.
• D) fund capital improvements in a specific block of schools.
• E) impose strict limits on how state governments can spend money from the federal government.

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Definitions:

Equilibrium GDP

The level of Gross Domestic Product where the aggregate supply equals aggregate demand within an economy, leading to a stable economic condition.

Full Employment GDP

The level of GDP produced when the economy is utilizing all available resources, including labor, at the maximum sustainable rate without causing inflation.

Recessionary Gap

A situation where the real Gross Domestic Product (GDP) is lower than the potential GDP, indicating underutilization of resources.

Multiplier

In economics, a factor by which an initial change in spending leads to a greater change in income and overall economic activity.