What are the three sources of funding for the public sector? Can the government rely on all of these sources in the long run? Explain.

What will be an ideal response?

ANSWER:

The three sources are (1 ) explicit user fees for government goods and services, (2 ) taxes, and (3 ) borrowing. Because the government cannot borrow forever so that, in the long run, its major sources of revenue are only user fees and taxes.