Question 1

The Omnibus Reconciliation Acts of 1981 changed the intergovernmental assistance system by:&#10;A) repealing federal revenue sharing.&#10;B) consolidating several categorical programs into block grants.&#10;C) expanding the scope of categorical grant systems.&#10;D) instituting the first federal block grants.

Accepted Answer

The Omnibus Reconciliation Acts of 1981 consolidated several categorical programs into block grants. It did not repeal federal revenue sharing or expand the scope of categorical grant systems, but it did institute the first federal block grants, which were designed to give states more flexibility in determining how to spend federal funding.

Question 2

Which of the following is NOT an argument for centralization of sovereign powers?&#10;A) uniformity of governmental services&#10;B) equality of access to governmental services and fiscal resources&#10;C) greater responsiveness to local needs and interests&#10;D) prevents the competitive &#34;race to the bottom&#34; phenomenon

Accepted Answer

Greater responsiveness to local needs and interests is an argument against centralization of sovereign powers, as it allows for more decision-making power at the local level.

Question 3

The Principle of Subsidiarity says:&#10;A) Government should only collect enough revenues for basic subsistence.&#10;B) Governmental responsibility for a function should be provided at the lowest level of government that can deliver the function effectively.&#10;C) Governmental responsibility for a function should be provided at the highest level of government that can deliver the function effectively.&#10;D) Agricultural goods should be taxed at a different rate than industrial goods.

Accepted Answer

The Principle of Subsidiarity advocates that governmental responsibility for a function should be provided at the lowest level of government that can deliver the function effectively. This means that central authorities should have a subsidiary function, performing only those tasks which cannot be performed at a more local level. This principle aims to ensure that decisions and actions are taken as close to the citizens as possible, thereby remaining transparent and accountable to those who are affected by them.

Question 4

The principles of subsidiarity and correspondence are used to:&#10;A) Determine the most appropriate level of government for a particular service responsibility.&#10;B) Refer to measure of income tax equity.&#10;C) Support the concept of government centralization&#10;D) Illustrate government's ability to achieve economies of scale.

Accepted Answer

The principles of subsidiarity and correspondence refer to the distribution of responsibilities and decision-making power between different levels of government. The principle of subsidiarity states that services and functions should be handled by the lowest level of government possible, while the principle of correspondence suggests that the level of government responsible for a service or function should correspond to the scope of the issue being addressed. Therefore, these principles are used to determine the most appropriate level of government for a particular service responsibility.

Question 5

An example of HORIZONTAL IMBALANCE in terms of own source funding at lower levels of government is:&#10;A) when the federal government has more money at its disposal than state governments&#10;B) when the state governments have more money than local governments&#10;C) when the federal government takes away funds but requires that service continue to be provided&#10;D) when various schools across the same state have unequal funding

Accepted Answer

Horizontal imbalance refers to the unequal distribution of resources or funding across similar levels of government or institutions, such as schools within the same state having different levels of funding.

Question 6

A federal categorical grant program to state governments is intended primarily:&#10;A) to take advantage of the low collection costs of federal taxes in comparison with the collection cost of state taxes.&#10;B) to redistribute fiscal affluence from high capacity states to low capacity states.&#10;C) to provide additional support to well-established state programs.&#10;D) to induce state governments to behave in a fashion other than the way they would have behaved without the aiD)

Accepted Answer

The purpose of federal categorical grant programs to state governments is to induce state governments to behave in a certain way, such as implementing certain policies or programs, that they may not have done without the aid. These grants come with specific guidelines and requirements attached to them, giving the federal government some measure of control over how the funds are used.

Question 7

The Correspondence Principle says:&#10;A) Every tax that is collected should have a corresponding fund in the government budget.&#10;B) Governments who provide the public good or service should be funded by those who consume the gooD)&#10;C) Governmental responsibility for a function should be provided at the highest level of government that can deliver the function effectively.&#10;D) When one city creates a good public service, other cities will follow.

Accepted Answer

The Correspondence Principle suggests that the costs of providing a public good or service should be borne by those who benefit from it, aligning the burden of payment with the receipt of benefits.

Deck 14: Intergovernmental Fiscal Relations: Diversity and Coordination