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Questions and Answers
What is a primary distinction between public finance and private organizations?
What is a primary distinction between public finance and private organizations?
- Public finance aims to maximize shareholder wealth.
- Public finance operates under fewer regulations than private finance.
- Governments allocate funds based on social or economic objectives. (correct)
- Private organizations have access to unlimited funding sources.
Which is NOT a characteristic of public finance?
Which is NOT a characteristic of public finance?
- Public finance seeks to maximize profit for shareholders. (correct)
- It deals with the management of large sums of government money.
- Governments can raise funds through taxation.
- Public finance requires adherence to legislative limitations.
Why have specialized fields emerged in financial management?
Why have specialized fields emerged in financial management?
- Organizations face identical financial problems.
- Different organizations pursue varied objectives. (correct)
- Public finance and private finance are identical in nature.
- There are no specific regulations governing finance.
Which of the following statements about public finance is accurate?
Which of the following statements about public finance is accurate?
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What is a primary responsibility of financial managers in public finance?
What is a primary responsibility of financial managers in public finance?
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Study Notes
Overview of Financial Management Fields
- Financial management encompasses five specialized fields to address diverse organizational objectives.
- Financial managers focus on managing money and financial claims.
Public Finance
- Involves central, state, and local governments managing substantial funds from various sources.
- Governments must use funds in accordance with strict policies and procedures.
- Authority to raise funds includes taxation and other methods while abiding by legislative constraints.
- Different objectives exist between government entities and private businesses; governments aim for social and economic goals rather than profit.
- Public finance has evolved as a distinct field to address the complex financial matters encountered by government entities.
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