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1. Public Finance – Basic Concepts, Ties and Aspects

1. Public Finance Basic Concepts, Ties and Aspects Aim of this chapter to introduce to the issue of Public Finance ; to present Basic concepts of this topic and learn about their contents; to understand the linkages of Public Finance on economic theory. Key words Public Finance , Public sector , Public revenues, Public expenditures, functions of Public Finance , collectivism, individualism, allocation function, redistribution function, stabilization function, market failure, Lorenz curve, Gini coefficient, non-optional, non-refundable, non-equivalent. Required entry skills Basic orientation especially in macro and microeconomics, politics and related terms. Study time requirements Approximately 2 3 hours. Outline Basic concepts, ties and Aspects Linkages to economy of Public sector Public Finance causes of development Development of fiscal theory Basic Concepts, Ties and Aspects Public Finance as a concept may be understood on two levels 1) as a practical activity of all components of Public administration and 2) as a theoretical area.

1.2 Linkages to Economy of Public Sector Whereas public finance relates to financial operations, relationships and tools for implementing the provision of public goods, transfers and the stimulation of economic entities to follow a certain behaviour, the term public sector means a specific part of the national economy.

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