In a bond covenant, a city agreed to create and maintain a $2 million reserve. These funds can be used

Only to make the final year's interest and principal payments on the bonds.

Only to make the interest and principal payments on the bonds in a year in which the city is unable to make them from other resources.

To make either the final year's interest and principal payments on the bonds or to make the payments in any year that the city is unable to make them from other resources.

By the city as it chooses since the funds legally belong to the city.

Obligations issued in the name of a government on behalf of a nongovernmental entity are called

		Overlapping debt.
		Conduit debt.
		Committed debt.
		Moral obligation debt.

To seek protection under the Federal Bankruptcy Code, a government must

		Be unable to provide the level of services it has provided in the recent past.
		Be unable to pay its debts in the current year.
		Have budgeted expenditures in excess of revenues.
		Both (b) and (c).