Why Are State Governments More Likely Than the Federal Government

question 65

Multiple Choice

Why are state governments more likely than the federal government to cut spending on programs that serve low-income residents?

• A)State governments cannot run deficits as the federal government can, and state governments have more limited taxing capabilities than the federal government.
• B)The federal government cannot run deficits as state governments can, and the federal government has more limited taxing capabilities than state governments.
• C)The federal government must abide by the "general welfare" clause of the Constitution and provide minimal levels of support for low-income residents, while state governments do not.
• D)State governments only began enacting spending programs for low-income residents in the 1990s, while the federal government has been providing such services since the 1800s.

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Definitions:

Cash Disbursements

Outflows of cash for expenses, assets, or other types of payments.

Cost of Goods Sold

The direct costs attributable to the production of goods sold in a company, including materials and labor.

Merchandise Inventory

The total value of all merchandise that a retailer, wholesaler, or distributor has on hand that is available for sale.

Cash Balance

The amount of cash held by a company at a given moment, reflecting its immediate liquidity.