Public Resources, Capital Formation, and Taxation Principles
Unit III
Public Resources (Concept)
Classifications:
- According to Neumark:
- Relationship between public and private economy (Principles)
- Originating or Derived:
Reviews originarios/derivados 3 authors - Depending on current, capital or financing
- Depending on whether effective or not effective remedies
- According to whether ordinary or extraordinary
Public Capital Formation
Public capital formation is divided into 3 stages:
- Creation of a country: Newly established countries require infrastructure like roads, routes,
Macroeconomics and Economic Policy
Macroeconomics
The Economy as a Whole
Macroeconomics is influenced by external market shocks, internal factors, and state intervention. These factors impact supply and demand.
Aggregate Demand
Aggregate demand (AD) is the total expenditure in an economy at a given price level. It includes spending by households, businesses, the public sector, and foreign entities. The formula for AD mirrors that of GDP: AD = C + I + G + (X-M).
Factors Affecting Demand:
- Income Level
- Money Supply
- Taxes
Aggregate Supply
Aggregate
Read MoreUnderstanding Macroeconomic Factors: Consumption, Investment, and Economic Growth
Overall Functioning of the Economy
The macroeconomic objectives are to achieve economic growth, ensure full employment, and maintain price stability. GDP growth leads to improved living standards. However, during crises, companies face challenges selling goods and services, leading to reduced production and hiring. This, in turn, increases unemployment and decreases citizen income.
Overview
Several factors influence a country’s economic progress:
- Internal Market Forces: Changes in population, consumption
Banking Operations and Risk Assessment
Bank Debt and Asset Operations
Factors Affecting Asset Operations
Banks primarily take money from customers as deposits and offer it to others through various asset operations like loans and discounts. This financial intermediation involves the risk of borrowers defaulting, so banks must assess the creditworthiness of customers—their capacity to repay—before lending.
To counterbalance risks, banks may require customers to purchase additional products or clear payroll and bills.
In essence, providing
Read MoreUnderstanding Market Forces: Origins, Pillars, Equilibrium, and Elasticity
Item 4: The Market and Its Forces
1. What are Markets and Why Do They Exist?
Markets originate when individuals or groups produce more than they need and interact with others to exchange goods and services. A market is the means by which those who wish to acquire a particular good connect with those who want to sell it.
- From Barter to Money and Prices:
- The first form of trade was barter, the exchange of goods and services without money.
- Barter had limitations, leading to the emergence of money as a facilitator
Understanding Marx’s Core Concepts: Capital, Value, Labor, and Alienation
Capital
The term capital refers to resources allocated to generate revenue or obtain economic benefit. It is the foundation for new production. The initial step involves productive work that creates a product, transforming it into capital and enabling its reproduction. Capital takes various forms: money, commodities (like wheat or timber), or any product used in new production or consumed unproductively. Capital is classified based on its function:
- Supplies: Essential for worker subsistence during