Question

When increased demand for urban services combines with a shrinking tax base (where businesses and affluent people move out to the suburbs and beyond), central cities around the country struggle with
a. the fiscal squeeze.
b. urban sprawl.
c. invasion and succession.
d. isotopic surfaces.
e. how to fill ecological niches.

Answer 1

Answer:

They struggle with a. fiscal squeeze.

Explanation:

Fiscal squeeze is experienced when income reduces over time and expenses continue to increase, which cause the body in question to experience problems in meeting its budgetary requirements.

In the case of central cities, a shrinking tax base is a reduction in income as public entities derive their incomes from taxes. Likewise, an increase in the demand of urban services increase their budgetary requirements as it is incumbent upon them to provide these services. When both of these stimuli are introduced, they experience a fiscal squeeze.

Answer 2

Answer:

The correct option is A: the fiscal squeeze

Explanation:

When there is an increase in the demand of urban services but there is a shrink in the tax base, a situation where people move out from urban areas to rural and suburbs, there is every tendencies that the country will have a huge struggle with the fiscal squeeze. This is because the government will try to increase the taxes and hard revenue squeezes.