NGPF Personal Finance Practice Exam

The statement that taxes fund social welfare and infrastructure is accurate because taxes are a primary source of revenue for governments. This revenue is essential for funding various public services and programs that benefit society as a whole. Social welfare programs, which may include health care, education, unemployment benefits, and social security, rely heavily on taxpayer contributions. Similarly, infrastructure projects, such as road construction, public transportation systems, and utilities, are financed through tax revenues, ensuring that the community has the necessary facilities and services for a functional society.

This understanding is fundamental in personal finance as it highlights how tax money is utilized to improve the quality of life for all citizens, rather than viewing taxes merely as a deduction from income or financial burden.