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Questions and Answers
Private finance involves adjusting income to expenditure.
Private finance involves adjusting income to expenditure.
False
Public finance has a specific unit of time that is called the fiscal year.
Public finance has a specific unit of time that is called the fiscal year.
True
Public finance allows for both internal and external borrowing.
Public finance allows for both internal and external borrowing.
False
Private finance does not have a specified period for its financial adjustments.
Private finance does not have a specified period for its financial adjustments.
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Expenditure in public finance is adjusted to meet income levels.
Expenditure in public finance is adjusted to meet income levels.
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Political institutions are only concerned with the financing of government outlays.
Political institutions are only concerned with the financing of government outlays.
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Political institutions include both rules and accepted procedures that evolve over time.
Political institutions include both rules and accepted procedures that evolve over time.
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The purpose of political institutions is solely to determine how government outlays are financed.
The purpose of political institutions is solely to determine how government outlays are financed.
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Government actions are determined through static rules that do not change.
Government actions are determined through static rules that do not change.
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Political institutions include universally accepted procedures that apply in all countries.
Political institutions include universally accepted procedures that apply in all countries.
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Study Notes
Public vs. Private Finance
- Public finance focuses on how government adjusts income and expenditure
- Private finance focuses on adjusting expenditure to income
- Public finance uses the fiscal year as a unit of time
- Private finance does not have a specific time period
- Public finance can utilize both internal and external borrowing
- Private finance only uses external borrowing
Political Institutions & Production Possibilities Frontier
- Political institutions determine what a government does and how its finances are managed
- The Production Possibilities Frontier shows the limit of what a society can produce at any given time
- Society's limited resources means that they cannot have everything they want
- Businesses do not give away products for free, households must purchase them
- Businesses use the money from selling their goods and services to fund their operations
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Description
This quiz explores the fundamental differences between public and private finance, highlighting their unique characteristics and roles in economic management. It also discusses the relationship between political institutions and economic production through the Production Possibilities Frontier.
