Which of the following is true about the US Federal government's ability to borrow money?
A. Elected elected officials in the federal government can prove to voters that they are responsible by paying back government debts on time.
B. The constitution forbids the federal government from raising taxes, so the government needs to cover the expenses of the services it provides.
C. The federal government can put money back into the economy during times of economic hardship without raising taxes.
D. Purchases of goods and services the government make on credit cards can be insured by credit card companies, unlike items purchased with taxpayers' dollars.
Is the answer C.?
Right.
Thank you!
You're welcome.
The answer is C
Sure.?
Are y’all sure ?
No, the correct answer is B. The constitution forbids the federal government from raising taxes, so the government needs to cover the expenses of the services it provides.
To arrive at this answer, let's go through the options one by one:
A. Elected officials in the federal government can prove to voters that they are responsible by paying back government debts on time. This statement is not entirely accurate. While it is true that elected officials have a responsibility to manage the government's finances, paying back government debts is not primarily about proving responsibility to voters. It is more about ensuring the stability of the economy and maintaining the ability to continue borrowing.
B. The constitution forbids the federal government from raising taxes, so the government needs to cover the expenses of the services it provides. This statement is true. The U.S. Constitution does not explicitly forbid the federal government from raising taxes. In fact, the federal government does have the authority to raise taxes. However, the statement is correct in suggesting that taxes alone may not be sufficient to cover all the government expenses. Therefore, the government needs to borrow money to cover any shortfall between its revenue and expenditures.
C. The federal government can put money back into the economy during times of economic hardship without raising taxes. This statement is not entirely accurate. While it is true that the federal government can inject money into the economy during times of economic hardship using various tools like fiscal stimulus packages or adjusting monetary policy, borrowing money is one way to fund these interventions. In practice, borrowing money could lead to increased government debt.
D. Purchases of goods and services the government make on credit cards can be insured by credit card companies, unlike items purchased with taxpayers' dollars. This statement is also not accurate. Government purchases made on credit cards are typically not insured by credit card companies. The government's purchases are financed using taxpayer dollars or through borrowing.
Therefore, the correct answer is B.