1. Explain the four questions of public finance. 2. Subnational governments collect only part of total tax revenues and spend more than they receive from their taxpayers. How is it possible and what does it imply for local finance? 3. Suppose your town wishes to build a dam to protect itself from the risk of flooding. Despite the fact that each family in the town is willing and able to pay up to $200 to have the dam built and it will cost only $150 per family, a voluntary contribution campaign is unable to raise enough funds to build the dam. Why? What type of problem is this, and what solution would you recommend? 4. Does taxing the wealthy to give benefits to the poor increase social welfare? Explain.
1. Explain the four questions of public finance. 2. Subnational governments collect only part of total tax revenues and spend more than they receive from their taxpayers. How is it possible and what does it imply for local finance? 3. Suppose your town wishes to build a dam to protect itself from the risk of flooding. Despite the fact that each family in the town is willing and able to pay up to $200 to have the dam built and it will cost only $150 per family, a voluntary contribution campaign is unable to raise enough funds to build the dam. Why? What type of problem is this, and what solution would you recommend? 4. Does taxing the wealthy to give benefits to the poor increase social welfare? Explain.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:1. Explain the four questions of public finance.
2. Subnational governments collect only part of total tax revenues and spend more than
they receive from their taxpayers. How is it possible and what does it imply for local
finance?
3. Suppose your town wishes to build a dam to protect itself from the risk of flooding.
Despite the fact that each family in the town is willing and able to pay up to $200 to
have the dam built and it will cost only $150 per family, a voluntary contribution
campaign is unable to raise enough funds to build the dam. Why? What type of problem
is this, and what solution would you recommend?
4. Does taxing the wealthy to give benefits to the poor increase social welfare? Explain.
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Since you have asked multiple questions, we will solve the first question for you. Please ask remaining questions separately or resubmit the question and mention the remaining portion which needs to be solved.
Public finance is related to the study of the role of the government of the country to manage the economy. It involves managing and assessing the government revenues and expenditure to achieve optimal results and avoid undesirable ones.
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