Flashcards on Public Economics: Core Concepts
Public Economics: Core Concepts - Guide for Students
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Public Economics Theory
40 cards
Card 1
Question: What is public economics concerned with?
Answer: The impact of the public sector (government) on resource allocation and distribution, and the nature, principles and economic consequences of governme
Card 2
Question: What are the four decision-making areas (instruments of fiscal policy) in public economics?
Answer: Expenditure, taxation, financing, and regulation.
Card 3
Question: Give an example of how expenditure as a fiscal instrument allocates resources.
Answer: Spending income tax revenue on primary healthcare or borrowing to build an irrigation dam or highway.
Card 4
Question: How does regulation act as an instrument of fiscal policy?
Answer: By enacting laws that indirectly influence allocation of private resources, for example smoking bans in public places.
Card 5
Question: What does 'direct mobilization and allocation of scarce resources' refer to in the context of fiscal instruments?
Answer: Government procurement and spending of private funds (through expenditure, taxation, financing) to provide goods and services.
Card 6
Question: What does public economics analyse about the fiscal instruments?
Answer: The nature and impact of expenditure, taxation, financing and regulation on resource allocation and distribution.
Card 7
Question: Name three historical or theoretical perspectives on the role of government mentioned.
Answer: Smith (laissez-faire), Marx (socialism), and Keynes (interventionist).
Card 8
Question: What are the three broad views of the role of government summarized?
Answer: Individualistic (mechanistic), Public interest (collectivist/organic), and Developmental state.
Card 9
Question: What is the key characteristic and policy focus of the Individualistic view of government?
Answer: Key characteristic: free market economy focused on maximisation of individual welfare. Policy focus: efficiency of resource allocation and economic gr
Card 10
Question: What is the key characteristic and policy focus of the Public Interest (collectivist) view?
Answer: Key characteristic: maximisation of social welfare or national interest. Policy focus: distribution of income, combating poverty and equity issues.