Compared with state and local government spending, the federal government: A. most often has a balanced budget
B. can spend more than 5% of its budget on net interest per year
C. spends more on education
D. spends about 4-5% of GDP on education
Compared with state and local government spending, the federal government:
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The correct answer is B. can spend more than 5% of its budget on net interest per year.
Explanation: The federal government has significant expenditures on net interest due to its large amount of outstanding debt. Unlike state and local governments, which are often required to balance their budgets, the federal government can run deficits and allocate a portion of its budget (often exceeding 5%) towards paying interest on that debt. This flexibility allows for higher net interest spending compared to state and local levels.
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