chapter 4 role of government policy

Question 1

what are 3 types of budget?

Answer 1

• balanced
• surplus
• deficit

Question 2

what is balanced budget?

Answer 2

government expenditure = government revenue

Question 3

what is surplus budget?

Answer 3

govrnment expenditure < government rebenue

Question 4

what is deficit budget?

Answer 4

total expenditure > total revenue

Question 5

what is 3 types of government revenue?

Answer 5

• tax revenue
• nontax revenue
• non revenue receipts

Question 6

what is tax revenue?

Answer 6

contribution by individual or a firm to government to be used in common interest of economy
direct tax : individual income tax, companies tax
indirect tax : import duties, sales ta x

Question 7

what is regressive tax?

Answer 7

rate of tax will decrease when income increase

- amunt tax is fixed

Question 8

what is proprtional tax?

Answer 8

rate of tax fixed even rate income will change

- tax imposed will increase when income increase

Question 9

what is progressive tax?

Answer 9

rate of tax will increase when income increase

Question 10

what is non tax revenue?

Answer 10

revenue aries from other sources selain ta x

exp : license permit, petroleum royalty, fees and penalties

Question 11

what is non-revenue receipts?

Answer 11

include refund of ex[enditure and receipt from gov agency

Question 12

what’s the internal sources of borrowing public debt

Answer 12

borrow from citizen through the sale of securities, bonds and saving certificates to citizen

Question 13

whats the external sources of public debt etc?

Answer 13

international money market. exchange w banks in paris london etc

Question 14

whats 2 categories of government expenditure?

Answer 14

• government operating expenditure

- government development ex[enditure