Đề 9 – Bài tập, đề thi trắc nghiệm online Tài chính công

National defense most closely fits the definition of a pure public good. It is largely non-excludable (protecting everyone within a nation`s borders) and non-rivalrous (one person`s safety doesn`t diminish another`s). Education and healthcare have elements of both public and private goods, while roads can be made excludable (toll roads).

Progressive taxes are rooted in the ability-to-pay principle. They are structured so that higher-income earners bear a greater tax burden, both in absolute terms and as a percentage of their income, reflecting a greater capacity to contribute to public funds.

The key distinction lies in the point of collection. Direct taxes are paid directly by the taxpayer to the government (e.g., income tax). Indirect taxes are levied on transactions (e.g., sales tax, VAT) and are collected by businesses, who then remit them to the government. The incidence of indirect taxes can be shifted.

Decentralization in fiscal federalism, by giving more fiscal autonomy to lower levels of government, can lead to public services that are better tailored to the specific needs and preferences of local populations. Local governments are closer to citizens and can be more responsive to their demands.

Financing long-term projects with debt aligns the cost with the benefits over time. Future generations who will benefit from the infrastructure also contribute to its financing through future taxes that service the debt. This is a principle of intergenerational equity. While option 3 may be a political consideration and option 4 a short-term effect, option 2 is the most economically sound rationale.

Market failure occurs when the free market mechanism fails to achieve Pareto efficiency, leading to suboptimal outcomes. This is a central justification for government intervention in the economy, a core subject of Public Finance, to correct these failures and improve societal welfare.

The core functions of Public Finance are allocation, distribution, and stabilization. Maximizing private business profits is not a direct function; instead, governments aim to create an environment conducive to overall economic well-being, which may indirectly benefit businesses but is not the primary goal of Public Finance itself.

The allocation function of public finance deals with how resources are allocated in the economy. It involves government intervention to correct market failures like externalities and to provide public goods that the private sector may under-provide.

Public debt is the accumulation of past government budget deficits minus surpluses. It represents the total amount of money owed by the government to its creditors, both domestic and international.

The free-rider problem arises because public goods are non-excludable. Individuals can benefit from the good even if they don`t pay for it, creating an incentive to `free-ride` and not contribute. This can lead to under-provision of public goods if left to the private market, justifying government provision or funding.

Crowding out is a potential negative effect of expansionary fiscal policy. When the government borrows more to finance increased spending or tax cuts, it can increase the demand for loanable funds, potentially driving up interest rates. Higher interest rates can then reduce private investment, partially offsetting the stimulative effect of fiscal policy. Option 1 is the opposite of crowding out.

Persistent budget deficits lead to the accumulation of public debt. Servicing this debt requires future tax revenues, potentially burdening future generations and limiting the government`s fiscal space for other priorities. While deficits can stimulate short-term growth, long-run persistent deficits can have negative consequences. Option 1 and 3 are generally incorrect.

To combat inflation (a general increase in prices), contractionary fiscal policy is used. Decreasing government spending reduces aggregate demand, helping to cool down the economy and reduce inflationary pressures. Option 3 refers to monetary policy, not fiscal policy.

A negative externality occurs when a transaction or activity imposes a cost on a third party who is not directly involved. Pollution from a factory is a classic example, where nearby residents bear the cost of environmental damage without being party to the factory`s production or consumption.

The Laffer Curve is a theoretical concept in economics that posits a non-linear relationship between tax rates and tax revenue. It suggests that at very high tax rates, further increases can discourage economic activity to such an extent that tax revenue actually falls. This is a controversial concept with limited empirical support in most real-world scenarios, but is important in public finance discussions.

Vertical equity addresses fairness across different income levels. It generally suggests that those with greater ability to pay (higher incomes) should contribute a larger share of taxes, often through progressive tax systems. This contrasts with horizontal equity, which focuses on equal treatment of equals.

Public Finance specifically examines the government`s role in the economy, focusing on how it raises and spends public funds. Options 1, 2, and 4 are related to other areas of economics, not Public Finance.

A balanced budget occurs when total government revenue (primarily from taxes) is equal to total government expenditure in a given period (usually a fiscal year). Options 1 and 2 describe budget surpluses and deficits, respectively.

When demand is inelastic, consumers are less responsive to price changes and will continue to purchase the product even with a tax-induced price increase. Elastic supply means producers are more sensitive to price changes and can more easily reduce supply. Therefore, consumers will bear a larger share of the tax burden.

Government expenditure aims to achieve broad societal goals such as economic growth, equity, and provision of public services. Maximizing shareholder value is a goal of private corporations, not a primary objective of public spending. Government actions may indirectly impact shareholder value, but it`s not a direct expenditure goal.

Expansionary fiscal policy (increased spending or tax cuts) can increase borrowing and potentially lead to higher interest rates, crowding out private investment. Fiscal policy also often suffers from implementation lags and political considerations, making it less nimble than ideally portrayed in theory. Option 4 is incorrect as fiscal policy inherently has lags.

Stabilization policy aims to smooth out the business cycle, preventing or mitigating recessions and periods of high inflation. The main goals are to achieve and maintain full employment and price stability. Options 1, 3, and 4 relate to other functions of public finance, but not primarily stabilization.

Transfer payments are government payments to individuals for which no goods or services are exchanged in return. Social security benefits, unemployment benefits, and welfare payments are examples. Salaries to government employees, infrastructure spending, and military purchases are government expenditures on goods and services, not transfers.

Horizontal equity is a principle of tax fairness that suggests individuals in similar economic situations (e.g., similar income levels) should be treated equally under the tax system. This means they should pay similar amounts of tax. Option 1 describes vertical equity.

A public good is defined by two key characteristics: non-excludability (it`s impossible to prevent people from using it) and non-rivalry (one person`s use does not reduce its availability to others). National defense is a classic example.

Tax incidence refers to the economic burden of a tax – who actually pays the tax in terms of reduced real income, regardless of who is legally obligated to remit the tax to the government. It depends on the elasticities of supply and demand.

Fiscal federalism deals with how public finances are structured in a multi-level government system. It examines the allocation of expenditure responsibilities and revenue-raising powers among different tiers of government, aiming for efficient and equitable provision of public services across regions.

Information asymmetry, where one party in a transaction has more information than the other, can lead to market failures like adverse selection (e.g., in insurance markets) and moral hazard (e.g., in banking). Government intervention (e.g., regulation, disclosure requirements) may be needed to mitigate these inefficiencies and improve market outcomes.

A regressive tax takes a larger percentage of income from lower-income earners than from higher-income earners. VAT on essential goods can be regressive because lower-income individuals spend a larger proportion of their income on these necessities compared to higher-income individuals.

The government budget constraint is a fundamental concept stating that all government expenditures must be financed. The three primary sources of financing are taxation, borrowing (issuing debt), and in some cases, printing money (though this can lead to inflation). Option 2 and 4 are overly restrictive interpretations of the constraint.