海曼财政学课件.ppt

Chapter 1 Individuals and Government Public Finance Public finance is the field of economics that studies government activities and the alternative means of financing government expenditures. Government Governments are organizations formed to exercise authority over the actions of persons who live together in a society and to provide and finance essential services. Functions of Government Provide items we cannot easily make available for ourselves or purchase from others in markets Law enforcement and courts Redistribute income and economic opportunity Income support for elderly, unemployed, poor Stabilize economic fluctuations Inflation Regulate production and consumption For improved health, elimination of excessive monopolistic control over prices Political Institutions Political Institutions are rules and generally accepted procedures that evolve for determining what government does and how government outlays are financed. Examples of Political Institutions Majority rule Representative government The Allocation between Private and Government Resources Private Food Housing Cars Clothing Government National Defense Public Schools Police Distribution of Government Goods and Services Nonmarket rationing: Prices and willingness to pay those prices are not applicable to goods like national defense. The Mixed Economy: Markets and Politics Pure Market Economy Virtually all goods and services are supplied by for-profit private firms. Supply and demand determine price. Characteristics of a mixed economy: Government supplies many goods and services Government regulates private economic activity Government expenditures equal ? to ? of GDP Government participates in markets as a buyer of goods and services Government Expenditures in the United States Government purchases of labor land capital Government Transfer Payments Welfare Social Security Government Expenditures in the U.S. International Comparisons Structure of Federal Government Expenditures Purchases o