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GOVERNMENT

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gladys dela pena

on 2 May 2014

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Transcript of GOVERNMENT

GOVERNMENT
AND
ECONOMIC ACTIVITY
design by Dóri Sirály for Prezi
Since the demise of colonialism and the advent of democracy and elected governance, the role of government, or the ruling force, has undergone tremendous change. As humans and society in general tries to move towards a better world, the involvement and responsibilities of governments and administrations throughout the world are getting more diverse and challenging.

GOVERNMENT

is any organization that holds the highest power in a region or a country and is the ultimate arbitrator in matters of public policy, law, and order. A nation state is defined by the existence of a government which has control over a nation's dominion.
is to set and enforce the "rules of the game or laws in any economy".
*EXECUTIVE*
has sole authority and responsibility for the daily administration of the state and executes or enforces the law.

*LEGISLATIVE*

having the power to make laws


*JUDICIAL*
relating to courts of law or judges
ordered or done by a court
responsible for dealing with all legal cases involving
the government
5 MAIN PURPOSE OF GOVERNMENT
Defense:
One of the five purposes of government is to defend the borders of the nation against foreign invasion. Hence, all governments have some form of defense system that includes the army, the navy and the air force. Maintaining internal order is also one of the critical defense purposes of a government. This is taken care of by the internal police force.

National Identity:

Each nation has own unique way. Each nation has its own traditions and culture. It is said that for a nation to exist, it must have an identity. For instance, no two flags of any two nations are alike nor are the national anthems and pledges. Hence, one of the most important functions of a government is to protect and uphold the identity of its nation.

Representation:
A government represents the interests of the nation. To protect and safeguard the interests of the nation, the government enters into bilateral trade agreements, negotiations, treaties and so on, with the governments of other nations.

Infrastructure:
One of the main purposes of the government is to provide good infrastructure to all its countrymen in the form of roads, bridges, drinking water, electricity and communication networks.

Social Welfare:

Last but not the least, introducing social welfare programs to protect and fulfill the interests of the minorities, such as to provide education and healthcare facilities to the underprivileged classes of the economy, is one of the primary purposes of the government.

2 EXTREME ECONOMIC SYSTEMS

PURE MARKET
:
An economy in which markets answer all allocation decisions and answers all three questions of allocation. There is no government. Markets do it all. This is a theoretical ideal or extreme that does not exist in the real world.
Due to scarcity, all societies or economies must answer three basic questions:

*
What will be produced?

*
How will it be produced?

*
Who will get what is produced?

COMMAND MARKET:
An economy where supply and price are regulated by the government rather than market forces. Government planners decide which goods and services are produced and how they are distributed.


MONOPOLY
*A monopoly is a structure in which a single supplier produces and sells a given product. Its characterized by an absence of competition, which often results in high prices and inferior products.

MONOPOLIST
*A person, group or organization with a monopoly. In other words, an individual or company that controls all of the market for a particular good or service.

PROPERTY RIGHTS
*
We mean determining the people who have the right to use the resource.


Bundle of rights are the ff:
> right to use the good
> right to earn income from the good
> right to transfer the good to others
> right to enforcement of property rights

A good or service is called
excludable
if it is possible to prevent people (consumers) who have not paid for it from having access to it. By comparison, a good or service is
non-excludable
if non-paying consumers cannot be prevented from accessing it.

A
rivalry goods
consumed by a single user. It can be durable, where users may use them one at a time, or nondurable,
Non-Rivalry goods
consumption or possession to multiple users. National parks, roads and the Internet.
Public Goods
*
A product that one individual can consume without reducing its availability to another individual and from which no one is excluded. Economists refer to public goods as "non-rivalrous" and "non-excludable". National defense, sewer systems, public parks and basic television and radio broadcasts could all be considered public goods.
BUDGET

is a description of a financial plan. It is a list of estimates of revenues to and expenditures by an agent for a stated period of time. Normally a budget describes a period in the future not the past.

TOTAL REVENUE

is the price of an item multiplied by the number of units of that item sold.

TOTAL REVENUE - TOTAL SPENDING = NET BUDGETARY POSITION





BUDGET SURPLUS
considered a sign that government is being run efficiently. A budget surplus might be used to pay off debt, save for the future, or to make a desired purchase that has been delayed. A city government that had a surplus might use the money to make improvements to a run-down park

BUDGET DEFICIT
When spending exceeds income, which must be financed by borrowing money and paying interest on the borrowed funds, much like an individual spending more than he can afford and carrying a balance on a credit card.
TAX
refer to a payments made to the government by economic agents that are based on their earnings, ownership of assets and transactions. this is a mandatory with corresponding fines and penalties for the failure to make payments on time.

TAX REVENUE
government income due to taxation

NON-TAX REVENUE
represent the national government's earnings from its services to the public, capital and grants.


NET INCOME
gross income minus taxes, allowances, and deductions.
An individual's net income is used to determine
how much income tax is owed
.

GST
The tax is levied in order to provide revenue for the federal government. The Goods and Services Tax is paid by consumers, but it is levied and remitted to the government by businesses
.

TRADE AND INTERNATIONAL TRANSACTIONS TAX

levied by governments on the value including freight and insurance of imported products. Different tariffs are applied on different products by different countries





SOCIAL SERVICES
Benefits and facilities such as education, food subsidies, health care, and subsidized housing provided by a government to improve the life and living conditions of the children, disabled, the elderly, and the poor in the national community.

ECONOMIC SERVICES
spending on agriculture, agrarian reform, natural resources, trade and industry, tourism power and energy, roads communication and other transport.
DEBT SERVICE
the interest on debts that the national government owes domestic and foreign institutions.
DEFENSE
the act of defending someone or something from attack, something that is used to protect yourself, your country,
GENERAL PUBLIC SERVICES
which is provided by government to people living within its jurisdiction, either directly (through the public sector) or by financing provision of services.
NET LENDING

the amount of extra funds that a sector has available to provide for either direct and indirect lending purposes to other similar counter-parts.

INCOME DETERMINATION
Gross Annual Income is the anticipated total income, All income should be included, whether received by check, in cash, or in the form of goods and services. Income includes, but is not limited to, the full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and any other compensation.

AGGREGATE EXPENDITURE
as the current value of all the finished goods and services in the economy. The sum total of all the expenditures undertaken in the economy by the factors during a given time period.

EQUILIBRIUM INCOME

established where aggregate quantity supplied is equal to aggregate demanded. central tendency of real income that equates the plans of consumers with those of producers.


FISCAL POLICY

is the use of spending and taxation by the government to influence the level of economic activity.

EXPANSIONARY FISCAL POLICY

policy that seeks to expand the money supply to encourage economic growth or combat inflation (price increases). One form of expansionary policy is fiscal policy, which comes in the form of tax cuts, rebates and increased government spending. Expansionary policies can also come from central banks, which focus on increasing the money supply in the economy.


CONTRACTIONARY FISCAL POLICY

policy that is used as a macroeconomic tool by the country's central bank or finance ministry to slow down an economy. Contractionary policies are enacted by a government to reduce the money supply and ultimately the spending in a country.

This is done primarily through:
1. Increasing interest rates
2. Increasing reserve requirements
3. Reducing the money supply, directly or indirectly

This tool is used during high-growth periods of the business cycle, but does not have an immediate effect.
MULTIPLIER BALANCED BUDGET
the budgeting process where total revenues are equal to or greater than total expenses.
INFLATION
is defined as a sustained increase in the general level of prices for goods and services.
DEFLATION
is when the general level of prices is falling
FULL-EMPLOYMENT

A situation in which all available labor resources are being used in the most economically efficient way. Full employment embodies the highest amount of skilled and unskilled labor that could be employed within an economy at any given time.

FRICTIONAL UNEMPLOYMENT

is the amount of unemployment that results from workers who are in between jobs, but are still in the labor force.
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