Question

Which of the following is an example of a "grants-in-aid" to states?

• A. A loan provided by a foreign country to a state for infrastructure development.
• B. A tax collected by the state government and kept entirely for state use.
• C. Federal funds allocated to states for general revenue sharing without specific restrictions.
• D. Money given by the central government to states for a specific purpose

Answer 1

Answer:

D. Money given by the central government to states for a specific purpose

• Grants-in-aid are financial transfers from the central government to the states, often with the condition that they are used for specific projects or schemes.