Explain the difference between general grants and categorical grants. Under what circumstance will they have the same impact? In that case, will one have an advantage over the other?
What will be an ideal response?
General grants come with no strings attached while categorical grants come with a specific spending purpose. A categorical grant will have the same impact as a general grant if the receiving government would have spent as much as the grant anyway. Given the higher record-keeping and monitoring costs for categorical grants, under the above condition the general grant is preferable.
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A) 1 movie ticket. B) 0.25 movie tickets. C) 4 movie tickets. D) 2 movie tickets.
The table above gives some of the entries in the national income and product accounts. The government sector has a ________, and the private sector has a ________
A) surplus of $50 billion; surplus of $25 billion B) deficit of $50 billion; surplus of $25 billion C) surplus of $50 billion; deficit of $25 billion D) deficit of $50 billion; deficit of $25 billion