Module 1 Flashcards
is the management of a country’s revenue, expenditures, and debt load through various government and quasi-government institutions
Public Finance
refers to managing a country’s revenue, debt, and expenditure via different governments and quasi-government institutions. The country’s revenue comes from the collection of various returns on investments, taxes, among other revenue streams
Public Finance
The main components of public finance include:
Tax collection
Budget
Expenditures
Deficit/Surplus
National Debt
is the main revenue source for governments. Other types of revenue in this category include duties and tariffs on imports and revenue from any type of public services that are not free
Tax Collection
is a plan of what the government intends to have as expenditures in a fiscal year
Budget
are everything that a government spends money on, such as social programs, education, and infrastructure. Much of the government’s spending is a form of income or wealth redistribution, which is aimed at benefiting society as a whole. The actual expenditures may be greater than or less than the budget
Expenditures
if the government spends more than it collects in revenue there is a deficit in that year. If the government has less expenditures than it collects in taxes, there is a surplus
Deficit/Surplus
if the government has a deficit (spending is greater than revenue), it will fund the difference by borrowing money and issuing national debt.
National Debt
Objectives of Public Finance
- Meeting public requirements
- Economic Growth and Development
3.Reduces Inequality - Establish Price Stability
The primary objective of public finance is to manage the basic requirements of the public, including food, health, housing, education, infrastructure, etc. When public needs are timely met, it contributes to the economic growth and development of the economy
Meeting public requirements
Effective public financial management results in economic development, eventually contributing to the nation’s growth
Economic growth and development
Another important objective of public finance is that it aims to reduce inequality by optimum allocation of resources
Reduces Inequality
Public finance also helps to control inflation and maintain price stability
Establish Price Stability
Types of Public Finance
Public Revenue
Public Expenditures
Public Debt
Financial Administration
It includes the revenue collected from public by the government by way of taxes, imports on duties, tariffs, indirect taxes, penalties, fees, maintenance, etc.
Public Revenue
