Which of the following statements regarding governments is FALSE?
A)Governments are dependent on the profitable sales of goods and services to finance their operations.
B)Governments have the right to tax.
C)As long as they are fiscally responsible, governments have the opportunity to issue significant amounts of debt in the capital markets at preferential interest rates.
D)Governments and their agencies finance their operations by levying fees and incurring liabilities.

Question

Quizplus · Accepted Answer

Governments are not dependent on the sales of goods and services to finance their operations. This statement is false because although some revenue may come from the sales of goods and services, the majority of government funding comes from taxes, fees, and other forms of revenue-raising measures such as borrowing.

Which of the Following Statements Regarding Governments Is FALSE