Public finance
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The document discusses several key topics related to public finance: 1) It outlines factors that affect the provision of public goods like the relative costs of private vs public production and people's attitudes toward direct government production. 2) It describes the goals of a free enterprise system like economic freedom and no monopolies. 3) It lists factors that influence government expenditures such as population growth, demands for services, and inflation. 4) The functions of public finance are also summarized like allocation of resources, methods of production, taxation, stabilization, and distribution of income.
Public finance
- 1. Public Finance Lecture #1
- 2. Factors that affect the provision and production of public goods Relative cost of private versus public production The capacity and willingness of the private sector to undertake production The case of the so called natural monopolies Decreasing cost industries The communitys attitude toward direct government production of goods and services
- 3. Goals or objectives of a Free enterprise system To strengthen economic freedom free markets Private property No more monopoly or cartel Variety of choices
- 4. Factors that affect the trend and pattern of government expenditures Increasing demand of the people for more and better government services Urgent necessity of providing food, clothing, housing, education, employment and health Countrys expanding population/growth in population Improving standard of living/lifestyle Inflation Increasing demand for economic and social development projects Changes in taste and preferences
- 5. Economic Efficiency Resource is optimally allocated minimizing waste and inefficiency Goods and services are produced at lowest possible cost
- 6. Economic Growth Positive level of production of goods and services Economic growth is brought about by technological innovation and positive external forces
- 7. Economic Stability Absence of excessive fluctuations in the economy Constant output growth low and stable inflation Stability of the value of money
- 8. Economic Security or financial security Stable income or other resources to support a standard of living now and in the future Probable continued solvency Predictability of the future cash flow of a person or other economic entity Employment security or job security
- 9. Functions of Public Finance Allocation Section What goods and services are to be produced Education Road Building Construction of power facilities Low cost housing Subsidies to consumers How much of each good or service to be provided
- 10. What method of production Goods and services should be produced directly by the government Public control Public supervision Management of private production should be sufficient Production should be left completely in private hands
- 11. Who is to pay and by how much for goods and services? How to finance? Borrowing Printing of money Sale of goods and services Through taxation
- 12. Stabilization Section Maintaining a high level of resource utilization that is full employment of all factors of production and stable value of money
- 13. Distribution Section This relates to the determination and attainment of a proper state of income distribution.
- 14. Actual Government Expenditures Economic Development Agriculture Transportation and communication Commerce and industry Other economic development
- 15. Social Development Education Public Health and medical care Labor and welfare
- 16. National Defense Peace and Order National Defense
- 17. General Government General Government Legislative Services Administration of Justice Pensions and Gratuities