Which of the Following Is True of the Challenges Faced

Which of the following is true of the challenges faced by state revenue and management systems?

A) State and local governments do not vary greatly in their administrative capabilities.
B) The federal government may attempt to reduce differences by giving larger federal grants-in-aid to low-fiscal capacity states.
C) State spending on functions such as health care and social services is not affected by differences in their fiscal capacity.
D) Higher incomes are associated with lower consumption and property values.
E) State revenue systems are better at collecting taxes on services than on goods.