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Which of the Following Uses of Proceeds from Private Activity

question 23

Multiple Choice

Which of the following uses of proceeds from private activity bonds will most likely qualify those bonds as federally tax-exempt?
I. public airport runway
II. baseball stadium
III. multifamily housing project
IV. mass rail transit


Definitions:

Economic Efficiency

A situation where all resources are allocated in a way that maximizes the total benefit to society or minimizes waste.

External Cost

A cost that a transaction or activity imposes on a party who is not involved in the transaction, often not reflected in market prices.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with environmental, health, and safety concerns of public and private actions.

Positive Externality

A benefit that is enjoyed by a third-party as a result of an economic transaction.

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