MODULE 1: GROUP 1

• Public finance is the study of the role of the government in the economy. It's the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
• Public or government revenue is money received by a government from taxes and nontax sources to enable it to undertake government expenditures.

  
  

  Ito yung natatangap na pera ng government na galing sa taxes and nontax sources
• Taxes are monetary impositions on people for the use and enjoyment of benefits provided by the government like security, roads and other basic amenities in life

  
  

  Ito naman yung monetary impositions sa tao sa paggamit nila ng mga benefits provided by the government.
• Non-tax sources include fees and penalties imposed on citizens for documents like licenses, certificates and other important official papers.

  
  

  Ito naman yung fees and penalties na ini-impose sa citizens for documents (licenses, certificates and other official papers)
• Scope of Public Finance:

  1. Public Revenue
  2. Public Expenditure
  3. Public Debt
• Public expenditure is spending made by the government of a country on collective needs and wants such as pension, provisions, security, infrastructure, healthcare, and other social services.

  
  

  Ito naman yung spending ng government para sa collective needs and wants such as pension, provisions , etc.
• The public debt is how much a country owes to lenders outside of itself. Often used interchangeably with the term sovereign debt. Public debt usually only refers to national debt.

  
  

  Ito naman yung utang ng isang country sa lenders outside of itself.
• Financial administration refers to a set of activities that are related to making available money to the various branches of an organization to enable it to carry out its objects.
• The word 'administration' refers to the organization and management of collective human efforts in the pursuit of a conscious objective.

  
  

  The word 'finance' refers to the monetary resource.
• Economic stability refers to an absence of excessive fluctuations in the overall economy. Price level stability is the key for so-called economic stability.
• Sources of Government Funds (5)

  
  

  1. Taxes on income and profits
  2. Taxes on property
  3. Taxes on domestic goods and services
  4. Taxes on international trade and transactions
  5. Other sources
• Similarities of Public and Private finance:

  Private finance aims to satisfy individual wants whereas public finance tries to satisfy the wants of all members of a society.
• Differences of Public finance and Private finance:

  
  

  Public finance is concerned with the revenue/incomes and expenditure, taxation and borrowings of the economy or government. Private finance is the study of income, expenditure and borrowings of an economic entity whether it is an individual or a corporate legal entity.
• Differences of Public and Private finance:

  
  

  Private entities plan their operations based on the amount of capital on their possession and other capital which they might obtain from the investors and creditors and work within the said limitations.

  
  

  Government, on the other hand, plans the perceived need of the citizens through a budget proposal and then looks for a way to finance the proposed expenditure
• Fiscal Policy is defined as the government’s measures to guide and control spending and taxation.

  
  

  Ito naman yung government measures para i-guide at i-control ang spending and taxation.
• Fiscal Functions:

  1. Allocation - The provision for social goods, or the process by which total resource use is divided between private and social goods and by which the mix of social goods is chosen
  2. Distribution - this is the adjustment of income and wealth to assure conformance with what society considers as fair or just.
  3. Stabilization - Stabilization policy seeks to keep an economy on an even keel by increasing or decreasing interest rates as needed.
• The main motive of private sector is to earn profit and, whereas the main motive of public sector is to provide services to public.
• Public sector refers to that portion of the economy that is owned and operated by the government. It includes government organizations, agencies, and enterprises that provide various goods and services to the public.
• Private sector refers to that part of the economy which is owned and operated by private individuals or companies rather than the government. It includes businesses, enterprises, and organizations that are driven by the goal of generating profits for their owners or shareholders.