Which is true regarding sources of revenue in a federal system?

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States have no financial powers or independent sources of revenue.

States are dependent on revenue or funds from the central government.

Sources of revenue for each level of government are specified to ensure its financial autonomy.

States have no financial autonomy.

answer is C.

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Detailed Solution

Sources of revenue for each level of authority are specified to ensure its financial independence or autonomy.
States have financial powers or revenue sources independent of the federal government. Sales, income, other taxes; fees; and federal payments are all sources of revenue for the state government. The sources of revenue for both the federal and state governments are clearly outlined in the constitution to preserve financial autonomy, implying that they are their primary sources of income.

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