Answer to Question #142543 in Accounting for sya

Question

Explain the difference between public sector and public finance

Answer 1

Solution:

The public sector is a part of the economy that comprises all government levels, publicly controlled or funded enterprises, and any other entity that provides public goods and services. The public sector consists of services such as primary healthcare and education, public roads, housing and transit, military, and police. These services are meant to benefit society as a whole, and it's non-payable.

Public finance can be described as the study of government activities. Therefore, public finance deals with how the government manages its resources to meet its ever-increasing expenditure. The components of public finance include tax collection, budget, deficits/surplus, and national debt. It also introduces fiscal policies to accomplish particular objectives such as economic growth, price stability, and a more equal income allocation.