Question

Which of the following scenarios is an example of internal financing?

A. When savers deposit money in banks, banks lend money to firms, and firms invest in physical and human capital.
B. When governments tax native citizens instead of multinational corporations.
C. When governments grant funding to corporations that agree to outsource jobs.
D. When nations give instead of loaning money.

Answer 1

Hello

When governments tax native citizens instead of multinational corporations.

so the correct option is

option B .

Thanks

Answer 2

The correct answer is B.

Raising funds from taxes is the manner through which nations obtain internal financing, which means that it comes from the individuals and economic agents that constitute such state (revenues from the public sphere). If, otherwise, private banks are involved when providing funds by granting loans, or taxes are charged to foreign agents then the source in such funding alternatives woud be external.