What is Public Finance?
Public finance is a system of fund allocation by State or its subsidiaries to maintain equilibrium of State macroeconomics. All the monetary functions of a state are governed by this cash flow. These may be the market conditions, cash-commodity relations etc. Any student of public finance should have full knowledge how public finance functions. Here is a list of most expected question and answers which comes in a public finance exam. With the list of such important questions and answers, BookMyEssay also explores Finance Assignment Writing Help in different ways like articles, essays, papers etc.
What are the Most Expected Questions and Answers in Exams of Public Finance?
Q1. What do public finances consist of?
Ans. Public finances consists of federal and local budgets, finance from state enterprises and extra-budgetary funds.
Q2. What are the prerequisites for the formation of public finances?
Ans. These are as follows: a) The use of developed form on money in the economy. b) Monetary economy. c) Creation of the system of forming public needs. d) Establishment of a system for ranking expenditure for public needs.
Q3. What is the State budget?
Ans. The state budget is the most important instrument of state regulation of the economy.
Q4. What are the public finances in the context of non-democratic political systems?
Ans. In context of non-democratic political systems like Monarchy, Dictatorship, Oligarchy etc, public finances are the personal treasury of a ruler or rulers; in democratic societies including constitutional monarchies, state finances are managed by parliaments and ministries of finance subordinate to them.
Q5. What determines the volume, structure and orientation of public finances?
Ans. These are determined by special elected bodies like the legislative and elective bodies.
Q6. What are the differences between public and government needs?
Ans. The government needs are indirect in nature such as maintaining army, foreign intelligence, command staff, creation of scientific devices. These are separate from daily needs of the citizens like food, money and clothing, and housing etc. The latter are termed as public needs.
Q7. What do public finances serve?
Ans. The public finances serve the complete interests of human society as a whole unit or single complex system. The needs which are peculiar to the society are served first.
Q8. What are the functions of public finances?
Ans. Public finances serve distribution and control functions of the society.
Q9. Are public finances dynamic?
Ans. Yes, public finances are dynamic. These can be changed legislatively to form incomes and to items of expenditure. Intergovernmental relations can be changed for the purpose of implementing a particular financial policy.
Q10. What is the financial policy of the state?
Ans. The financial policy of the state is a set of measures aimed at achieving the goals declared by the public authorities in the field of finance.
Q11. What is the difference between financial and monetary policy?
Ans. The main difference between the financial and monetary policy is that implementation within them is carried out by two formally independent state institutions – the Ministry of Finance and the Central Bank. The set of procedures for both policies are fundamentally different. Their results may contradict each other.
Q12. What is the key element of macroeconomic policy?
Ans. The key elements are financial and monetary policy.
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