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Public Finance

Public finance looks at the government sector of the economy and assesses government revenue and government expenditure. Public finance also focuses on the effects the government has on the allocation of resources, the distribution of income, and the stabilization of the economy. The distribution and production of public goods and taxes is managed by the government to benefit the economy. Market failure occurs when goods and services are not distributed correctly and the government's role is to prevent this from happening. 

The allocation of resources and resource utilization are part of the public financial management system. Public finance management includes expenditure management, the prioritization of programs, resource management, and other major economic managerial decisions. The economic activities that the government takes to improve public resources include taxation and public debt.

The data that the government uses to make decisions is based on “budgetary statistics” and “monthly statistics of government finance and banking”¹. The government allocates its budget into different separate accounts, which include general accounts and special accounts¹.

The public authority will adjust income to expenditure and will most often try to balance budget each year. Public expenditure is a main topic of discussion in public finance because it entails the total consumption and investment made by the government.



1. Public Finance. Retrieved from

Categories within Public Finance

Public Budgeting

Postings: 12

Public budgeting is how the government plans their decisions about resource allocation and how to spend financial resources.


Postings: 90

Taxation is the charges that governments place on individuals or corporations to finance their expenditure.

Financial Fraud and Its Consequences

Identify at least three loopholes in the organization's existing Anti-Money Laundering Policy and propose changes which would close those loopholes for National Bank of Greece.

Ethical Issues In Financial Services

What are two conflicts of interest faced by an Investment Advisor who is employed by a commercial bank or an investment bank? Given his fiduciary responsibility to his clients, how can these conflicts be avoided or resolved?

Financial Web Services

1. Name and describe the four types of services provided by financial services firms on the web? 2. Explain the two global trends impacting the structure of the financial services industry and their impact on online operations. 3. How have travel service suppliers benefited from consumer use of travel Web sites?

Trade Ethic

Hi, I need some help with the questions below: 1. Can a trader produce exceptional returns while simultaneously engaging in ethical behaviour? 2. Suggest incentives a financial services company can provide to influence ethical behavior of traders.

Individuals, Regulators, & Financial Institutions

Could you please give me 3 examples with explanation of how asymmetric information (among any combination of individuals, financial institutions, regulators, and other players) led to the crises associated with the current economic climate? If you have any citations, could you please include them as well? Thank you in advanc

Characteristics of Supply and Demand

I need help with these questions to contribute to my essay. Any assistance would be appreciated. Explain the law of supply, and why the supply curve slopes upward? How is the market supply curve derived from the supply curves of individual producers? - Identify what the major determinants of price elasticity of demand ar

Discussing Public Finance

What are the main areas of responsibility of the federal, state, and local governments? In what ways are they similar? How are they different? Provide examples.

Ideological views relating to public finance

What are some of the various ideological views that relate to public finance? Which seems closest to your personal views? Explain why. How might this affect your decisions as you work in governmental roles?

Public Finance and Role of Government

Imagine you work for your state's government. In what ways do your ideological views on public finance affect your opinions about the role of government? How will you work with those who share different views?

The Primary Objective (or Goal) of a Financial Manager in a Corporation

Please help with a problem involving the primary objective (or goal) of a financial manager in a corporation. First, briefly distinguish between a partnership as opposed to a corporate form of business organization. Next, explain the concept of the primary objective of the firm; that is, what is the basic goal of the financial

Entries for the Buyer & Seller; the Relationship of the Accounts

1. Assume that Company A buys $1,500 of merchandise from Company B for cash. The merchandise originally cost Company B $1,000. What entries should the buyer and seller make, and what is the relationship of the accounts for this transaction? 2. Which are prepared first: the year-end financial statements or the general jo

Achieving efficiency and pure public good

Indicate whether you agree with the following statement, and give your reasons for doing so: "If the beltline surrounding the city of Raleigh were a pure public good, efficiency would require that the price use the road be zero. However, during rush hour congestion, the road cannot be regarded as a pure public good and a tol

Characteristics of public goods

Explain the two characteristics of public goods and explain the significance of each from public provision as opposed to private provision. Include the free-rider problem as it relates to public goods and whether the U.S. border patrol is a public or private good and why.

public choice is embedded

In 1998, the people of Puerto Rico held a referendum in which there were five choices: - retain commonwealth status, - become a state, - become independent, - adopt "free association" (a type of independence that would delegate certain powers to the United States), and - "none of the above." Discuss the problems that

Interest income and willingness to save

How does a tax on interest income influence a person's willingness to save? Can the impact of the tax on savings be unequivocally predicted from theory? Explain why or why not. How can we encourage Americans to be more willing to save?

Public Finance Problem

Suppose a proposed new road to be constructed between Raleigh and Morehead City will lower the average cost per trip by car from $5 to $4. Currently, 500,000 trips are made between the two cities per year. An estimate indicates that, all other things being equal, the new road will increase the number of trips per year to 600,000

Behavioral Finance Case

For many years, the large retail firm Wal-Mart chose not to provide guidance. The firmâ??s legendary founder, Sam Walton, wrote in his autobiography that he did not care what the market thought. Beginning in 1994, Wal-Martâ??s earnings announcements generated a string of negative surprises. In the resulting post-earnings-annou

IS/LM diagram

1. Draw an IS/LM diagram which shows a macro equilibrium (use the â??intermediate range for the LM curve --- assuming the absolute value of lâ?? is less than infinity and greater than 0). Indicate the equilibrium interest rate by ro, and the equilibrium level of income by yo. 2 . Now suppose there is an increase in g

Financial Terminology

1. Which of the following reasons is most responsible for corporations being the most important form of business organization in the United States? a. Corporations have limited life. b. Stockholders have unlimited liability. c. Corporations are subject to less government regulation than the other forms of business organizati

Public Finance Impact of Taxes

A parcel of land is expected to yield annual rents equal to $10,000 per year forever. If the market rate of interest is 10 percent, calculate the market price of the land. Suppose you purchase the parcel of land. After your purchase, a 5 percent property tax on the land is imposed. Calculate the impact of the tax on the market v

Public Finance Math Problem

Suppose you currently earn taxable income of $100,000 per year. You are subject to an MTR of 50%. Currently, your ATR is 35 percent. Calculate your annual tax. Calculate the extra tax that you would pay per year if your annual income increased to $110,000. What is your ATR when your annual income is $110,000?

Acts of 1933 and 34

Explanation of how the 1933 and 1934 Acts were reactions to financial crisis arising from similar challenges 350-700 words

Financial Statement Analysis

Jack McClintock, president of McClintock Industries, wishes to issue a press release to bolster his company's image and maybe even its stock price, which has been gradually falling. As controller, you have been asked to provide a list of twenty financial ratios along with some other operating statistics relative to McClintock In

Corporate Finance Problem

1. Norman Internet Service Company is interested in selling common stock to raise capitol for capacity expansion. The firm has consulted First Tulsa Company, a large underwriting firm, which believes that the stock can be sold for $50 per share. The underwriter's investigation found that its administrative costs will be 2.5% o

account deficit

The media and others suggest that the current account deficit run by the U.S. is a problem for the economy. What do you think? What action(s) would you advise federal government officials to take on this issue? Additional Comments: The current account is equal to the difference between the value of exports and the value of