Question

Which of the following is a popular option for state and local governments wanting to complete construction projects that exceed their budgets?
A. declaring bankruptcy
B. raising taxes
C. borrowing funds
D. printing more money

Answer 1

Answer:

1.

B. state tax

C. Income tax

E. property tax

2.

B. Because it affects all future decisions state officials can make

3.

C. Borrowing funds

Answer 2

C. borrowing funds is your best answer.

While the government can raise taxes, this is obviously one of the last resorts, as the working-class generally resent increases in taxes. Another way is to borrow money through bonds and borrowing from banks. In both cases, the government borrows a sum of money, and agrees to pay back the sum and interest within a certain amount of time.

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