Per-Capita Debt

### What does per-capita debt represent? - [x] The total bonded debt of a municipality divided by its population. - [ ] The total revenue of a municipality. - [ ] The amount of debt paid by individuals annually. - [ ] The total assets of a municipality. > **Explanation:** Per-capita debt represents the total bonded debt of the municipality divided by its population, highlighting the debt burden on each individual resident. ### How can per-capita debt be calculated? - [ ] By dividing the total revenue by the total expenses of the municipality. - [x] By dividing the total bonded debt by the population. - [ ] By multiplying the total bonded debt by the population. - [ ] By adding the total bonded debt and the population. > **Explanation:** Per-capita debt is determined by dividing the total bonded debt of the municipality by the population. ### Why is it important to compare per-capita debt over multiple periods? - [ ] To understand population growth. - [ ] To forecast future revenues. - [x] To reveal trends in the municipality’s debt burden. - [ ] To assess the municipal asset value. > **Explanation:** Comparing per-capita debt over multiple periods helps to reveal trends in the municipality’s debt burden, which is crucial for informed financial decision-making. ### Which entity is primarily interested in per-capita debt levels? - [ ] Internal Revenue Service (IRS). - [ ] Environmental Protection Agency (EPA). - [x] Bond analysts. - [ ] Department of Education. > **Explanation:** Bond analysts use per-capita debt levels to assess risks and sustainability of municipal bonds. ### If City C has a bonded debt of $150 million and a population of 75,000, what is its per-capita debt? - [ ] $1,500 - [ ] $1,000 - [ ] $3,000 - [x] $2,000 > **Explanation:** The per-capita debt of City C would be $2,000, as calculated by dividing $150 million by 75,000. ### What is bonded debt? - [ ] The total net income of a municipality. - [x] The portion of a municipality’s debt that is comprised of bonds issued. - [ ] The amount of fixed assets of the municipality. - [ ] The total expenditure of a municipality. > **Explanation:** Bonded debt refers to the portion of a municipality’s debt that is comprised of bonds issued to finance various public projects. ### When calculating per-capita debt, which factors are divided? - [ ] Revenue and Expenses - [ ] Debt and Assets - [x] Bonded Debt and Population - [ ] Total Revenue and Population > **Explanation:** Per-capita debt is calculated by dividing the bonded debt by the population of the municipality. ### Why might a higher per-capita debt not always indicate financial trouble? - [ ] Because the municipality might have additional hidden reserves. - [ ] Because the residents are not affected by municipality debt. - [x] Because it might be supported by adequate revenue streams or assets. - [ ] Because financial trouble is not measured by debt. > **Explanation:** A higher per-capita debt might be supported by adequate revenue streams or assets, indicating that the municipality can service the debt. ### Who typically monitors per-capita debt? - [x] Financial analysts and investors. - [ ] School boards. - [ ] Agricultural departments. - [ ] Public libraries. > **Explanation:** Financial analysts and investors typically monitor per-capita debt to assess the financial health and risk associated with the municipality’s bonded debt. ### In what way can the trend of per-capita debt be useful? - [ ] For monitoring the fluctuation in property values. - [x] For understanding the historical and future financial health of the municipality. - [ ] For determining the educational level of residents. - [ ] For calculating businesses’ tax liabilities. > **Explanation:** Trends in per-capita debt are useful for understanding the historical and future financial health of the municipality.