Discuss the economic activities of state in different fiscal system
Answers
Answer:
Title: Economic Activities and the State
Economic Activities and the State
Public Finance
The basic nature of any economy lies in the scarcity of its productive resources in relation to its want. Our wants are ever increasing and recurring while availability of resources for satisfying them lags behind.
An economy is constantly engaged in the solution of this eternal problem of scarcity. It therefore, undertakes various activities where by the available supply of resources is augmented, existing supplies are utilized more effectively, and some additional objectives like stability, growth, and distribution etc are met with as fully as possible.
The division of economic activities between public and private sectors of the economy should not be a haphazard one, but should be based upon relevant economic and socio-political objectives and within the constraints of the country’s institutional framework.
Accordingly, in a capitalist economy the main task of providing goods and services is assigned to the private sector in which individual economic units are motivated by economic rationality and guided by the market mechanism in their decision making. The owners of factors of production are guided by the income which they earn in alternative employments, the investors are guided by the profitability of alternative investments; the consumers try to maximize their consumer surplus and so on. In a pure market economy, virtually all goods and services are supplied by the private firms for profit and all exchanges of goods and services takes place through markets, with prices determined by free interplay of supply and demand. Individuals would be able to purchase goods and services freely, according to their tastes and economic capacity( their income and wealth), given market determined prices.
Answer:
traditional economic development policies primarily targeted at external
sources of growth through attracting new firms or firm relocations; and
2. policies which recognize that the engine for economic growth is typically
the small firm and, therefore, focus on promoting internal growth by
supporting entrepreneurship and creating an environment conducive to
private economic activity.
To address these issues, the report is broken into six sections following this
introductory section. The next section discusses what is meant by local economic
growth and development. That is followed by a section, which lays out the general
theoretical framework for thinking about local economic growth and development. This
section is followed by a general discussion of why some metropolitan areas grow and
some do not. The next section discusses the literature on which factors affect firm
location and economic growth. That is followed by a discussion of the specific impact of
state and local fiscal policies on local economic growth and development. The final
section then discusses the notion of a balanced tax system, which promotes local
economic growth and development, but does not unduly burden any