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Public Finance Essentials

Public finance deals with the income and expenditure of governments. There are several categories of financial activities for governments including public revenue, public expenditure, public debt, and financial administration and control. Public expenditure is incurred by governments at all levels to satisfy collective needs and promote economic and social welfare, while public debt involves methods for governments to raise funds to increase spending. Some key differences between public and private finance are that public finance relates to government money raising and spending while private finance involves individual and business income and expenses.

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9K views3 pages

Public Finance Essentials

Public finance deals with the income and expenditure of governments. There are several categories of financial activities for governments including public revenue, public expenditure, public debt, and financial administration and control. Public expenditure is incurred by governments at all levels to satisfy collective needs and promote economic and social welfare, while public debt involves methods for governments to raise funds to increase spending. Some key differences between public and private finance are that public finance relates to government money raising and spending while private finance involves individual and business income and expenses.

Uploaded by

hibaaqnaasir390
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Questions and answers

1. Define public finance?

Ans: is concerned with the income and expenditure of authorities and with the adjustment of one to
other

Ans: Deals with the income and expenditure of the government.

2. Name categories of financial activities of the government

Ans: public revenue

Public expenditure

Public debt

Financial administration and control

3. Define expenditure

Ans: is the aim of the collection of revenue

4. Effects of public expenditure

Ans: total employment

Total income

Total investment

Distribution

General price level

5. Define public debt

Ans: methods of public debt are an Important raising funds to increase government expenditures.

6. Estate similarities and difference between public and private finance

Ans: finance in general means public as well as private finance.

Public finance relates to the money raising and income-expenditure function of the government.

Private finance refers to the income and expenditure of an individual or private businesses.

7. Name significance of public finance

Ans: capital formation

Economic stabilization

Long /short term consideration

Elasticity of finance
8: Name relationship of public finance with Other field

Ans: economics

Politics

History

Sociology

Jurisdiction and law

Ethics

Psychology

9: Define public expenditure

Ans: is incurred by public authorities-central, state and local governments either for the satisfaction of
collective needs of the citizens or for promoting their economic and social welfare.

10. Differentiate current and capital expenditure

Ans: capital expenditures contribute to increase productive capacity of the nation and therefore, are
known as development expenditures.

11: Objectives of public expenditure

Ans: security of life against external aggression and internal disorder an injustice

Development or up-gradation of social life in the community

12. Reasons for growing expenditure

Ans: welfare state: also known modern state, it aims at promoting the economic, political, and social
wellbeing of citizens.

Defense

Transport and communication

Population growth

Urbanization effect: is an important factor leading to relative growth of public expenditure in

modern times.

Rising trend of prices

Growth of democracy

Increasing in the activity of the state

The planning effects

Rural development effects


General expenditure and internal security

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