Which of the following is an example of fiscal federalism?

Question

Quizplus · Accepted Answer

Fiscal federalism involves the national government providing financial resources (such as grants-in-aid or revenue sharing) to state and local governments to encourage them to pursue certain policies or programs. Option B represents an example of this. Option A involves coercion or threats of taxation, which is not an example of fiscal federalism. Option C involves a mandate to raise taxes, which is also not an example of fiscal federalism. Option D involves a loan, which is not a grant or revenue sharing, and is not an example of fiscal federalism. Option E involves deficit spending, which is a broader concept related to government finances, but not specific to fiscal federalism.

Which of the Following Is an Example of Fiscal Federalism