A conditional intergovernmental grant is one that:
Correct answer: B. Must be used for a specified public purpose
- A. Can be spent for any lawful public purpose
- B. Must be used for a specified public purpose
- C. Is provided only by foreign governments
- D. Is financed entirely through local taxation
Explanation
A conditional grant attaches conditions to the use of the funds, such as spending on health, education or infrastructure. An unconditional grant gives the receiving government greater discretion over its allocation.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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