Which of the Following Is TRUE of Fiscal Federalism

question 67

Multiple Choice

Which of the following is TRUE of fiscal federalism?

• A)The proportion of the gross domestic product spent by state and local governments has grown more rapidly than the proportion of the GDP spent by the national government
• B)The proportion of the gross domestic product spent by state and local government has grown less rapidly than the proportion of the GDP spent by the national government.
• C)States and localities spent 7.4 percent of our GDP in 1929; today they spend even less.
• D)Block grants are the main source of federal aid to state and local governments.
• E)Unlike the federal government,federal courts do not have the ability to impose mandates on state governments.

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Definitions:

Annual Consumption

The total amount of goods and services used or consumed by individuals or groups within a one-year period.

Disposable Income

Disposable income refers to the amount of money that households have available for spending and saving after income taxes have been accounted for.

Aggregate Household Wealth

The total net worth held by the households in an economy, combining all assets minus liabilities.

Durable Goods

Things that last at least a year or two.