CAF-2 · Chapter 1 · Question 11 of 13
Which principle of a "sound tax system" requires that the sources of revenue, taken as a whole, should be sufficient to meet the expenditures of the government and capable of expanding or contracting in response to public needs?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) Fiscal Adequacy
Explanation
Fiscal adequacy dictates that the sources of revenue should be sufficient to meet government expenditures and capable of expanding or contracting annually in response to variations in public expenditures.
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