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

When is production profitable according to price-taking firm, When is produ...

When is production profitable according to price-taking firm at profit, break-even or loss? Production profitable at profit, break-even or loss: a. When TR > TC, in that cas

Knight theory of the profit, Frank H. Knight treated profit as a residual r...

Frank H. Knight treated profit as a residual return to uncertainly profit. Obviously knight made a distinction between risk and uncertainly he divided risk into calculable and non-

Identity economics help to explain economic questions, What is identity eco...

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

Elasticity.., elasticity concepts occupies a central place in policy formul...

elasticity concepts occupies a central place in policy formulation explain in details

Current account, The Current Account This records all transactions inv...

The Current Account This records all transactions involving the exchange of currently produced goods and services and is subdivided into i.          Visibles: A record

Determine the scope of managerial economics, Determine The scope of manager...

Determine The scope of managerial economics The scope of managerial economics involves following subjects: 1.  Theory of demand 2.  Theory of production 3.  Theory of

Infant industry argument - reason for protection, Infant Industry Argument ...

Infant Industry Argument Advocates of this maintain that if an industry is just developing, with a good chance of success once it is established and reaping economies of sale,

Function and importance, explain the supply function and importance of supp...

explain the supply function and importance of supply analysis in brief

How income level must remain constant - law of demand, How Income level mus...

How Income level must remain constant - law of demand The law of demand operates only when income level of the buyer remains constant. If income rises when the price of commod

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