Future Business Leaders of America (FBLA) Securities and Investments Practice Test

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What is the primary purpose of Industrial Revenue Bonds (IDRs)?

To finance public transportation projects
To build a facility leased to a corporation
To upgrade municipal infrastructure
To fund educational programs

The correct answer is: To build a facility leased to a corporation

The primary purpose of Industrial Revenue Bonds (IRBs) is to finance the construction of facilities that are leased to corporations for industrial and commercial purposes. These bonds are issued by governmental entities to raise capital that is then used for private enterprises in order to promote economic development and create jobs. When the corporation pays back the bonds, they often benefit from the lower interest rates and tax-exempt status associated with these bonds. This financing approach allows local governments to encourage business growth and can lead to improved local economies. In contrast, options such as financing public transportation projects, upgrading municipal infrastructure, or funding educational programs do not align with the specific intention of IRBs, which is strictly focused on benefiting private industries through the lease of facilities.