Functions of budget, Managerial Economics

Assignment Help:

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.


Related Discussions:- Functions of budget

Fezzes is perfectly competitive, The  fez is the typical Arabic hat in the ...

The  fez is the typical Arabic hat in the shape of a short red cylinder. Historians believe it was manufactured in the city of Fes, in Morocco, during the 17 th century. It has be

Question 1, The market demand for brand X has been estimated as Qx=1500-3Px...

The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-2.5Py+7.5Pz

Asset market theory in environment and development, what is asset market th...

what is asset market theory theory in environmental economics?

Costs of unemploment and inflation, COSTS OF UNEMPLOMENT AND INFLATION   ...

COSTS OF UNEMPLOMENT AND INFLATION   In  an  economy  both  unemployment  and  inflation  have  adverse effects  and policy makers  formulate policy instruments to contain both

Trade cycle-schumpeter description, Schumpeter Description According to...

Schumpeter Description According to Schumpeter, a cycle represents wave like deviations in business activity from the equilibrium or trend line. There are equilibrium points an

The marginal external cost from congestion, The only road connecting two po...

The only road connecting two populated islands is currently a freeway. During rush hour, there is congestion because of the heavy traffic. The marginal external cost from congestio

Inelastic supply, Inelastic Supply Supply is said to be price inelasti...

Inelastic Supply Supply is said to be price inelastic if changes in price bring about changes in quantity supplied in less proportion.  Thus, when price increases quantity sup

Instruments of credit control, INSTRUMENTS OF CREDIT CONTROL The centra...

INSTRUMENTS OF CREDIT CONTROL The central bank employs several instruments to control aggregate credit in the country. While some instruments like the open market operations mi

National income and welfare, NATIONAL INCOME AND WELFARE The relatio...

NATIONAL INCOME AND WELFARE The relationship between National Income and Welfare is best explained in terms of economic growth (By economic growth is meant capacity expansio

Explain managerial economics according to mote and paul, Explain Managerial...

Explain Managerial economics according to Mote and Paul Haynes, Mote and Paul:  "Managerial economics refers to those characteristics of economics and its tools of analysis mos

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd