Final answer:
A major governmental fund has significant assets, liabilities, revenues, or expenditures and is subject to changes due to policy and events. Federal, state, and local governments manage budgets, determining revenue and spending, which can be influenced by legislative changes like the Sixteenth Amendment.
Step-by-step explanation:
A major governmental fund is considered to be major if it has at least one or more elements such as assets, liabilities, revenues, or expenditures that fulfill a set criteria of significance. At every level of the governmental structure (federal, state, and local governments), resources are allocated through budgets that show anticipated revenues and planned expenditures. Nevertheless, these budgets are not static and can fluctuate drastically due to policy decisions and unforeseen events impacting earlier fiscal strategies. Moreover, the federal government's budget is notable for its complex interplay with state and local entities, influencing a variety of services through both tax collection and expenditure allocations.
The size and scope of a major governmental fund can be understood in the context of overall governmental fiscal activity. In 2014, for instance, total revenues for federal, state, and local governments were respectively $3.2 trillion, $1.7 trillion, and $1.2 trillion. Factors such as the ratification of the Sixteenth Amendment have historically expanded the capacity of the federal government to generate revenue and, hence, influence spending at all government levels, highlighting the dynamic nature of government finance.