Public Finance - 2835 Words

public finance is the study of the financial activities of governments and public authorities. divided into three categories: a - Knowing what activities the public sector engages in and how these are organized (that is, revenue gathering and expenditures) b - Understanding and foreseeing the full consequences of these governmental activities c - Evaluating alternative policies. The positive side describes the activities of the public sector, explains the reasons of the programs in existence and also analyses the consequences of government policies The normative side, on the other hand, is concerned with designing new policies that meet certain objectives. *two approaches are complementary, because, in order to make judgements about what†¦show more content†¦example education externalities keep the market from reaching allocative efficiency because the gains or losses generated are external to the pricing system; they are unpriceable. The transaction costs of externalities misallocation of resources or a failure of the market economy to generate a Pareto optimum. positive externalities 3 types of interventions the government may engage in: (i) Subsidies: Subsidies are monetary payments government budget to lower their prices Long-term, low-interest loans and tax reductions are examples of subsidies. (ii) Government production at lower priceswe have a direct governmental influence on allocation because the government itself undertakes the responsibility of the production of the positive external good. supplies it at a lower price, in some cases free of charge iii)compulsion:it regulate the consumption of certain goods and services.example in most country basic education is compulsory and parents have to send their children to school. negative externalities arise from harmful production and consumption, 3 instruments the government may use. These are: (i)Tax penalties or legal punishments to limit the production or consumption of a good. e.g. outlawing pollution (ii) The government may impose excise taxes on goods so as to discourage their consumption or production. known as sumptuary taxes, e.g. taxes on the consumption of alcoholic drinksShow MoreRelatedThe Strong Performance Of Public Finances1198 Words   |  5 Pages The strong performance of public finances in Sweden is an interesting case.Previous studies have compared the current crisis with the banking crisis in Sweden in the early 1990s to study the reason behind Sweden’s strong public finances (Flodà ©n, 2013). When comparing the macroeconomic behavior during the current crisis and during the banking crisis in the early 1990s, it showed a larger drop in GDP and in exports while unemployment increased very less during the current crisis. The absence of largeRead MorePublic Finance1387 Words   |  6 Pagesexpenditures would not fare well waiting a turn in line for a day on the Court calendar. Further delays would inevitably ensue due to the number of filings, and the complex issues to be considered. Schultze further effectively portrays a general public that would struggle to understand the impact of the amendment until it reached Main Street, taking the form of a decline in the quality and performance of government (at all levels), higher taxes, and expenditure cuts†¦or the cumulative effectRead MoreFinance Of The Public Debt2307 Words   |  10 PagesBuying Treasury Securities The Bureau of the PUBLIC DEBT Department of the Treasury Treasury Securities The Treasury issues three types of marketable securities - bills, notes, and bonds. These securities are direct obligations of the United States Government. When originally issued, they are sold through an auction process. They are commonly known as marketable securities because after their original issue that may be bought or sold in the secondary (commercial) market at the prevailing marketRead MoreThe Government And Government Of Public Finance1622 Words   |  7 PagesIntroduction The branch in which we read thoroughly the contribution of the government in money related matters is known as public finance. In this branch we analyze the government and government expenditure of public authorities with the help of these we tries to achieve useful effects discarding harmful effects. The initial point for accessing the public finance is the proper role of finance. Actually during special conditions private markets will distribute goods and services among people in a effectiveRead Morenotes about Public Finance Essay1824 Words   |  8 PagesName -----------------------------------ID# -----------------------------------Public Finance Homework 2 Due in class – October 28 There are 20 multiple-choice questions, each is worth 5 points for a total of 100 points plus one extracredit question. Please, write with pen, print and staple this HW. I. Externalities Problem: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution levels. The marginal costs associated with pollution reduction are MCARead MoreThe Global Financial Crisis Has Caused A Massive Deterioration Of Public Finances1465 Words   |  6 PagesThe global financial crisis has caused a massive deterioration in public finances in the euro area. The 2009 recession severely curtailed public revenues and weighed heavily on the welfare state. In addition, states have boarded on bank bailouts and costly stimulus packages. In 2010, no country belonging to the euro area was able to comply with the Stability and Growth Pact (SGP). Public debt in the euro area increased from 65% to 85% of GDP between 2007 and 2010. This debt crisis was certainlyRead MoreBuilding Finance And Operate For Procuring A Major Public Sector Project907 Words   |  4 PagesThe basis of Design Build Finance and Operate for procuring a major public sector project For the past twenty years, as stated by Gil (2013) , the new way by which the rapid demand of the public in terms of social vertical and horizontal infrastructures are manage is generally referred to as the Public Private Partnership (PPP). As also mentioned by HM Treasury (2008), all services under the public which are to be executed by means of the Public Private Partner system are of the guarantee to beRead MorePublic Finance1372 Words   |  6 PagesCHAPTER 1: MEANING, NATURE AND SCOPE OF PUBLIC FINANCE Def: Public Finance is the field of economics that studies government activities and the alternative means of financing government expenditures. Our focus in this course is on the microeconomic functions of government, the way government affects the allocation of resources and the distribution of income. THE LEGAL FRAMEWORK The Appropriation Act gives the Government of Belize the authority to collect revenue and incur expenditure withinRead MoreThe Principles Of Public Finance828 Words   |  4 Pagesimpact of this shift there are several principles of public finance that come into play. We will review three principles and discuss the impact this initiative has on all three. Principle of Public Finance 1 – Market Failure Market failure is defined as â€Å"when the market economy fails to fairly and efficiently allocate all resources, products, money income, and assets to their highest valued among alternative (social) uses† (Baker College, 2016, Public Sector Failure and Market Failure section, paraRead MorePublic Finance Assignment831 Words   |  4 PagesProblem 1 (Public goods/Voting) Recommended source: Rosen, Public Finance. Citizens/voters in a hamlet inhabited by only three citizens consider the provision of street light. The marginal benefit curve of each citizen is downward sloping in the amount of street light provided. The cost of providing street light consists of erecting lamp posts and the electricity for illumination. For part a)-c) of this question, assume the following: All lamps are switched on during the hours of darkness such