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What is meant by public expenditure?
answered by Finley (87 points)Public expenditure of government expenditure come from the budget from i.e. current budget and capital budget. The current budget is for non-development expenditure such as defense, unemployment allowances etc. whereas capital budget expenditure are for development purposes. e.g. construction of roads, dams, railways etc. In order to achieve a high growth rate in the economy, government expenditure has got to be maintained at a reasonably high level, particularly in third world countries. However, in the world today. We see that many third world countries are suffering. This may be attributed to the natural calamities, war-zones and inappropriate management of the country. Resources are not being fully utilized or even worst still misallocated and wasted.
The question is what are the causes of increase in public expenditure? Generally public expenditure for each country rises each fiscal year. The increase may be due to the following reasons.
For defense:
The World today is said to be at war without a battle, in general. Developed countries are producing modern armaments, other countries purchase it. A country is either said to be at war or is trying to prevent it, whichever way, their Government expenditure on defence rises and rises. The pentagon, USA is reported to having increased its defence expenditure to 23 Trillion and this includes the orders placed by foreign countries, which have yet to be settled.
For welfare services/social services:
In order to meet the rising demand for houses, electricity, water supply, means of communication, just to mention a few, have got to be increased, and of course social services such as free education and, health facilities have got to be provided.
To increase public revenue:
Ever since the industrial revolution, demand for heavy plants and machinery have shot up. As a result per capita incomes of the individuals have risen. Hence, they are to be taxed more dearly. As a result government revenue is increased and hence government expenditure must be increased as it must not have a surplus budget particularly in case of third world countries. This would hamper their economic growth.
For growth of population:
As a result of an increase in population public expenditure is adversely affected due to the fact that the Government has to increase its expenditure on the supply of goods and services for the people.
For government subsidies:
As it is in the third world countries, in order to encourage entrepreneurs to increase their exports, the government covers up a certain percentage of the cost. As a result the govt. expenditure in the aggregate sense is largely increased.
To get or give a higher price level of resources:
Prices of resources are now-a-days reaching the sky height, particularly in the case of petroleum where OPEC countries have a monopoly over the resource. Besides that prices of other goods and services have also gone up and the public expenditure has also increased to meet the requirement.
A result of defective administration:
This is a serious matter and occurs to a great extent in some countries. Misallocation of resources takes place to corruption and as a result government expenditure is wasted.
For economic development:
Basically every government wants to achieve a desirable level/standard of living and in order to do so it has got to maintain a fairly high rate of expenditure in the public as well as private sector. Research has to be undertaken in both the agricultural as well as industrial sector in order to allocate, financial resources and in the meantime a certain amount of expenditure has got to be borne by the Government.
Thus, it must be understood that for government expenditure to exceed the government revenue, such a phenomenon is not an undesirable phase but rather it is a sort of productive measure in order to ensure that there is sufficient growth in the economy.
The basic aim of government expenditure is to ensure that the society obtains a maximum level of satisfaction as far as possible i.e. a high standard of living as well as environments. Thus, the government must ensure that the marginal benefit of each scheme must be equalized with each other. Every government motto should be maximum expenditure, maximum benefit, which means that all the resources must be properly allocated. Thus, the government should focus on the main expenditures such as energy projects, research for agricultural purposes to increase productivity etc.
As it is in England, it is the duty of the Chancellor of Exchequer to ensure that resources are properly allocated. The chancellor is given the authority to sanction projects for expenditures and he would have to answer to Parliament for any wrongdoing. In short there must be a legal authority to sanction public expenditure so that the audit department may scrutinize the expenditure incurred and eliminate extravagance. This canon means to say that the public expenditure should not be rigid. It should vary accordingly with the state of affairs. It should be fairly elastic. During the phase of a depression the Government must increase its expenditure so that stability of the economy is attained. Similarly during the phase of expansion or rather at the boom period, Government expenditure has got to be reduced and at the same time it must not adversely affect the people.
Public expenditure must be organized in such a way that it promotes the growth of the economy and reduces, if not totally eliminates the unequal distribution of wealth. Through fiscal policy the Government should control the price level with a high rate of growth and at the same time maintain a high level of expenditure to promote growth. However, the Government must govern within a means and keep its budgets balanced as far as possible.
What is tax incidence?
answered by Finley (87 points)Incidence is the final resting of a tax e.g. direct, tax incidence lies in every individual but in indirect taxes the incidence lies in the ultimate consumer, The modern meaning of incidence as introduced by Hicks is that incidence are changes in the income distribution brought about by changes in the budgetary policy i.e. changes in taxes and changes in public expenditure.
Taxation is important for the growth of an economy. However, not everybody pays the various kinds of taxes e.g. income tax. The main aim of incidence is to ensure that the burden of taxation is equally distributed among those who are able to pay tax. This is in accordance with Adam Smith’s canon of equality.
The determination of incidence is done by the following markers:
Elasticity: For this matter elasticity of demand and elasticity of supply must be taken into account. Supposing that demand for a taxed commodity is elastic, the tax is thus borne by the producer himself. However, if the demand for it is inelastic, the ultimate consumer bears the burden of tax. Similarly if the supply is elastic the tax burden is borne by the consumer and if it is inelastic the produce himself bears the tax burden.
Price: Price is an important determinant of incidence. Shifting of tax burden only takes place when it results in a change in price. If price remains constant, tax does not shift and hence no actual tax is charged.
Time: Generally the adjustments in production technology and know-how cannot take place in the short run. Hence, demand for the good depends largely on the rise and fall in price. Thus as a result of a decline in price, the producer himself has got to bear the incidence of the tax. However, in the long-period, full adjustments are possible and the incidence of tax is shifted on the consumer.
Cost: Changing the scale of production adversely affects the cost and this depends on whether the industry is an increasing, deceasing or constant cost industry. In this case of a diminishing cost industry, if the scale of production were to be reduced, this would raise the cost and also the price of the commodity. Incidence of taxation is borne by the consumer.
Nature of Tax: Windfall gains and losses will not shift the incidence of tax if there were to be any tax on windfall gains and losses.
Market Form: Under perfect competition no single producer or purchaser is able to influence the price level. Thus, there will not be any shifting of tax. However, in a monopoly market the monopolist can influence the price and shift the tax on the consumer.
There are various Kinds of incidence of taxes. First is the incidence of tax on monopoly. A monopolist is said to have already determined a price which will yield him maximum profit. Supposing a tax is levied on the monopolist’s profits, he will not be able to shift the tax anymore assuming that if he intends to do so by increasing the price level, this will in demand for this good and his profits will suffer.
Second is the incidence of tax on personal income. Generally economists are of the similar opinion that income tax cannot be shifted and is levied upon the person who bears it. However, to a certain extent businessmen can shift their income tax burden to the consumer in the form of higher prices. However, once again, they may only partially do this as a sharp increase in the prices will leave an adverse effect on their profits as they too face tough competition.
Third is the incidence of tax on commodities. There are various factors determining the incidence of tax on commodities.
Elasticity of Demand and Supply: As I mentioned earlier, if the demand for a commodity is inelastic, incidence of tax will be on the consumers. However, if demand is elastic, less is purchased and part of the tax is thus borne by the seller. When the supply of a commodity is elastic, incidence of tax falls on the consumer. This is because the producer is able to influence the supply of the goods, if the supply is inelastic; the producer bears the burden of tax e.g. perishable commodities because he is not in a position to raise the price by reducing the supply. Thus, the amount of tax levied on both parties depends upon the degree of elasticity of demand of supply.
If there are substitutes of a taxed commodity the seller cannot simply increase price level for fear of losing customers. Thus, in such a case the seller bears part of the tax burden. However, if the substitutes are imperfect, then the seller may be able to shift the whole tax burden on the consumer.
If a commodity is produced under law of diminishing returns, prices cannot be increased to the amount of the tax the cost of production is high and in doing so would result in losing customers. However, if the commodity is produced under law of increasing returns then prices may be increased even more than the actual tax as cost of production is low and buyers are not exactly adversely affected on the other hand. If the commodity is produced under the law of constant returns then the increase in price will be up to the exact amount of tax on the good.
What is a balanced diet?
answered by Finley (87 points)The diet which contains carbohydrates, proteins, fats, vitamins, minerals, salts and fiber in correct proportion to fulfill the body requirement is called balanced diet. Balanced diet is required to choose the combination of food that improve the health rather then the type of food that raise the risk of illness like heart disease, cancer and diabetes. Healthy eating means not eating more than the requirement. One should eat enough calories but not too much, balance should be maintained between the calories intake and calories burn.
For balanced diet one should eat variety of foods especially vegetables, grains and fruits. Intake of liquid should be good for healthy eating. Our body requires 75 percent water. We know that water is a vital part of our diet. So plenty of water should be taken in routine because it flushes our kidneys and bladder. Healthy diet is not just about what we eat it is also about how to eat smart. Healthy food is not useful to our body unless it is taken properly. Food should be properly chewed. One should listen to its body that what and how much food it requires. One should avoid stress while eating. Instead of junk food, vegetables and fruits should be added in the daily dietary intake. They are source of vitamin and minerals.
For healthy diet one should limit sugary foods, salts and refined products. While eating meal one should stop eating before feeling full. It is because human brain takes few minutes telling body that it has enough food. One should start the day by taking healthy breakfast. For Balance diet it is important to eat small healthy meal throughout day rather then taking three big meals. This habit will keep the metabolism system in good state. Milk and juices should be taken in routine. For sustaining the healthy body balance carbohydrates fiber proteins and minerals are required. Carbohydrates are basically sugar and starches that help the body to perform the physical activity. Fibers are found in fruits vegetables and grains. Fibers are essential for healthy digestive system. It helps keeping blood sugar level even. Proteins are required for the good function of cells, tissues and organs. Lack of protein can result in slow growth, weakening heart and respiratory system.
What is energy and what are the different types of energy?
answered by Finley (87 points)Energy can be defined as the ability to work. It is something that can not be seen or touched. It will be not wrong to say that energy is something that is always present but not visible. Energy is found in different forms in our surroundings. Movement, sound, heat and light all give the evidence about the presence of energy in our surrounding.
There are two main types of Energy.
1) Kinetic energy
2) Potential energy
Kinetic energy can be called energy in motion. In other words it is energy of a moving object. A thrown football, speeding automobile and a water fall are the example of the kinetic energy.
Potential energy can be defined as energy stored in the matter. This type of energy appears in different forms. It can also be defined as energy in a matter due to its position or arrangement of its parts. Potential energy can simply be called as stored energy. Some common example of the potential energy is gravitational potential energy, elastic potential energy and chemical potential energy.
Beside these two major types of energy there are some other forms of energy. That is Heat energy, Electrical energy, Chemical energy, Light energy and Nuclear energy.
Heath energy is basically the molecules movement. It is the subset of the kinetic energy. Electrical energy can be defined as the movement of electron due to electrical force. Chemical energy comes under potential energy until chemical reaction occur which results in atoms and molecules motion. Light energy is the form of energy in which movement of waves or light particles called Photon take place. Nuclear energy is the energy of certain elements in which the internal forces pent up on their nucleus. In sum Energy can be called the capacity to do work. If the object is moving it will be called Kinetic energy. But if there are some forces which prevent the object movement it is said to be having potential energy. Energy can be called the property of matter. That’s why scientist has discovered the ways to measure it. This measurement of energy helped man to understand how to use energy, how to change its form and what to do in order to increase energy efficiency.
How the differential works in a motor car?
answered by Finley (87 points)When a motor car goes round a corner or a bend the inside wheels have a shorter distance to travel than the outside wheels. For this the inside wheels have to travel more slowly than the outside ones. This difference in wheel speeds is made possible through the differential.
The differential is a mechanism that consists of an axle that joins two wheels, usually the rear ones. In the middle of the axle there is a round shell that contains a series of geared wheels including the crown wheel. The pinion, which is part of the propeller shaft that runs from the gear-box of the car, sets these geared wheels into motion. When the car turns a corner the geared wheels of the differential vary the speeds of the path again and both rear wheels traveling at the same speed.
How sound travels through the air?
answered by Finley (87 points)Everybody knows whether a sound is pleasant or unpleasant, loud or soft, mellow or sharp, but few people can actually explain what sound is and what are its qualities.
The string of a guitar or a harp is silent until it is plucked with the finger or a plectrum and set into vibration. The skin of a drum does not produce any sound until it is struck with a drumstick and made to vibrate. The sound of an accordion comes from the vibration of its reeds. The sound of the saxophone is also produced by the vibration of its reed. In a trumpet the noise comes from air that is thrust into the instrument and vibrated.
All sounds-the human voice, the noises made by animals, the tinkling of a bell or the buzzing of insects-is the result of vibration. Scientists have also discovered that there can be no sound if there is no air to be vibrated.
An experiment was once carried out in which a bell was placed inside a glass jar. As soon as all the air was removed from the jar the ringing of the bell could no longer be heard. Astronauts have confirmed that there is absolute silence in space.
It is easy, therefore, to see that sound spreads through the atmosphere like waves or ripples that spread outwards in a pond when something drops into it.
How methane gas deposits are formed?
answered by Finley (87 points)Methane is a colorless, odorless gas that comes from the decomposition of organic matter, including both farm and town refuse. Methane can also be produced chemically in a laboratory or extracted industrially from coke. But most of this gas is obtained from natural deposits which lie under the soil.
This type of methane is also the product of fermentation over a period of hundreds of millions of years. It originated from what was once a vast amount of small plant and animal life. These plants and animals became buried in mud and sand and through the ages hardened into rock.
The great forces at work in the bowels of the Earth, such as heat and pressure, then acted on these organic remains to change them into petroleum or natural gas.
Methane is lighter than air and in only slightly soluble in water. It burns readily in air with a pale, slightly luminous flame and is very hot. It is a stable material, but a mixture of methane and air can be highly explosive, as is shown by the explosions in coal mines.
How does hail form?
answered by Finley (87 points)Much of the hail that falls on Europe occurs in summer though scientists believe it is caused by cold temperatures. Some meteorologists believe hail is formed when a current of hot air rises to about 1,000 to 2,000 meters and collides with a cold air current that is descending. The sudden lowering of the temperature freezes the moist air it contains into the little pellets of ice that form hail. This process may be repeated several times, the hailstone gathering more and more coatings of ice, until it becomes heavy and falls.
Other meteorologists think that hail is produced by electrical processes. Whatever the cause hail is a constant threat to farmers who for centuries have sought ways of defending their fields from it. Hailstorms do not usually affect large areas, but they can be so concentrated and intense that they destroy and entire year’s crop wherever they strike. Vineyards are frequently affected in this way.
Occasionally huge hailstorms can fall and cause enormous damage. In November 1889 hailstones the size of cricket balls fell in the streets of Louth in New South Wales.
How do fish poison their prey?
answered by Finley (87 points)There are certain fish which present serious dangers even to man because of their strength and ferocity. The shark is an obvious example, but among the most dangerous are the poisonous fish which use their venom in a number of ways.
Some have their flesh completely impregnated in poison and any attacker who bites them or eats them will die. Other fish impregnate their eggs with poison to protect their unborn young.
There are also fish with spines of fins that contain poison and others with teeth that carry venom, just like snakes.
The most unusual weapon belongs to the stingray. This is a strange, flat fish that spends much of its time on sandy or muddy bottoms of shallow waters where it is almost invisible. Most sting rays inhabit warm seas, but a few kinds are found in the rivers of South America.
If the fish is trodden on it lifts its tail which contains a long, poisonous sting that is usually kept in a sheath. This sting can inflict serious wounds, especially when the long, thin tail is lashed. The poison is painful; it can paralyze and, in some cases, prove fatal.
How do hot mineral springs form?
answered by Finley (87 points)One of the best-known effects of the great heat that lies inside the Earth can be seen in hot, mineral springs that gush out of the surface of the Earth. These are rich in minerals such as common salt, which rise to ‘bitter springs’, and iron, sulfur and magnesia, giving medicinal waters.
Scientists differ in their opinions on how these hot springs began. Some believe they come straight up from underneath and the ground where they were trapped millions of years ago during earth movements. Other scientists think the water began as rain which seeped through the soil, became heated and then rose again.
Perhaps both opinions are correct. It is certain, however, that the waters of these springs have flowed under the soil, become enriched with mineral salts and been heated to boiling point.
