Which of the Following Is True Regarding the Use of Special

question 49

Multiple Choice

Which of the following is true regarding the use of Special Revenue Funds?

• A) Special Revenue Funds may be used whenever a government wishes to segregate income for specific purposes.
• B) Special Revenue Funds are appropriate if the sole source of resources are assigned funds
• C) Special Revenue Funds may only be used when a substantial portion of the resources are provided by restricted or committed revenue sources.
• D) Once a Special Revenue Fund is established, it will continue to be a Special Revenue Fund until all resources are exhausted.

---

Definitions:

Elastic

A characteristic of goods where their demand or supply changes significantly when the price changes.

Monopolistic Competitor

A market structure where many firms offer products or services that are similar but not perfect substitutes, allowing for some degree of market power.

Excess Capacity

describes a situation where a firm produces less than its total output capacity, usually resulting in inefficiencies and higher production costs.

Economic Profit

The difference between total revenue and total economic costs, including both explicit and implicit costs, reflecting the true profitability of a firm.