Introduction to Public Finance — Flashcards

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Public finance is the part of economics that deals with the revenue and expenditure operations of the government. It studies how the government raises money and how it spends it for public purposes.

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The word public signifies the government or state, including central, state, and local governments. It refers to all levels of government that collect revenue and spend it for public purposes.

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Prof. Dalton defined public finance as: "It is connected with the income and expenditure of public authorities and with adjustment of one to another." This means public finance studies both government…

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Public finance has become a powerful instrument for promoting social justice and economic welfare. It is no longer limited to collecting revenue and making expenditure; it also helps in achieving wide…

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The five main branches are: Public Revenue, Public Expenditure, Public Debt, Financial Administration, and Economic Stabilisation or Fiscal Policy.

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Public Revenue deals with the sources of public income. It studies the sources from which the government gets money, the classification of taxes, principles of taxation, incidence and shifting of taxe…

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Public Expenditure studies how the government distributes resources to meet different expenses. It also studies the principles the government should follow while allocating money to different sectors …

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Public debt becomes necessary because public expenditure increases as state activities increase. Normal revenue, mainly taxes, is not enough to meet all expenses, so the government borrows additional …