Fiscal federalism refers to the financial relationships between the national government and state/local governments. This includes the ability of the national government to provide funding (grants) directly to state and local governments, which is option B. The other options do not accurately describe fiscal federalism.

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Fiscal Federalism

Question 51

Multiple Choice

Fiscal Federalism

A) is a special form of income tax paid by corporations.
B) allows national government to give money directly to state and local governments.
C) is a program that gives state and local money to the national government.
D) requires the national government to issue loans to corporations.
E) is an example of state control over block and categorical grants.

Correct Answer: