Functions of budget, Managerial Economics

Functions of the Budget

The budget fulfils three main functions:

  • To raise revenue to meet government expenditure

The government of a country provides certain services such as administration, defence, law and order, environmental services and economic services.  Also it must meet the public debt.  Sufficient revenue must be raised to pay for this.

  • It is a means of redistributing wealth

In many countries, a situation has arisen where a small proportion of the population own a more than proportionate share of the nations wealth, while the majority of the population own only a small proportion of it.  One method of redressing such inequalities of wealth is through a progressive system of taxation on income and capital.  A progressive system is one whereby the wealthy people do not only pay more tax than the poor, but also pay a greater proportion of their income or wealth.

  • To control the level of economic activity

 The government uses the budget to implement fiscal policy, i.e. the regulation of the economy through governments expenditure and taxes.

Posted Date: 11/30/2012 3:02:13 AM | Location : United States

Related Discussions:- Functions of budget, Assignment Help, Ask Question on Functions of budget, Get Answer, Expert's Help, Functions of budget Discussions

Write discussion on Functions of budget
Your posts are moderated
Related Questions
Explain in brief the relationship between TR,AR and MR under perfect market condition.

Environmental issues factors This is governed by the below factors:  The type of economic system of the country Business cycles Industrial policy of the countr

Let consider the economy (above) again where the following set of stocks is traded:     x 1 =(2,2,0)    x 2 =(1,0,3)  x 3 =(0,2,4)          for the prices (p 1 , p 2 , p 3 )=(1,

Determine the Application of managerial economics Application of managerial economics isn't restricted to profit-seeking business organisations. Tools of managerial economics

Economics contributes a great deal with towards the performance of managerial duties and responsibilities. Just as biology donates to the medical profession and physics of engineer

Industry Paper: As a partial requirement for this course, you will have to submit a paper on an Industry of your choice. This is a highly structured paper, which consists of: 1.

Direct intervention   The government can also intervene directly in the economy to see that its wishes are carried out.  This can be achieved thorough: a.     Price and i

What is identity economics? How does identity economics help to explain economic questions that standard economics fails to address?

Green Shield Insurance gives NEMO Corporation with coverage for prescriptions, dental work, and extended health services. Every subscriber uses $435 worth of dental services per ye