Question

2. When issuing revenue backed bonds, receipts from all issuing governments sources are pledged to pay the interest and principal back to the bond purchasers.

True/False ___________True________

Correction to make true

____________________________________________________________________________________

3. The theory of tax expenditures is what drives the rationale for investors to purchase State/local bonds of either type (general obligation/revenue backed)

True/False_______True___________

Correction to make true

___________________________________________________________________________________

4. The Federal American Recovery Act, signed into law by President Obama, provided a mechanism that achieved the goals of federal grant policy by correcting for externalities and providing for a macroeconomic stabilizing mechanism.

True/False ____True______________

Correction to make true

Answer 1

2) True.

Revenue bonds repay creditors from income generated by the the project the bond itself is used to fund, such as a toll bridge.

3) True.

State/Local bonds attract conservative, income oriented investors because the interest income is usually exempt from federal and potentially state income taxes.

4) False.

The primary objective of the American Recovery and Reinvestment Act was to save existing jobs and create new ones. This Act was not intended to stabilize the macroeconomic factors, and was only limited to saving American jobs and creation of new jobs.

​​​