The Theory of Public Finance

The Theory of Public Finance studies how governments collect and spend money to influence a country's economy. It examines taxation—how taxes are raised from individuals and businesses—and public spending, which includes funding for services like education and healthcare. The goal is to understand how these financial decisions impact economic stability, growth, and equity, ensuring that resources are allocated efficiently to meet societal needs while minimizing negative effects like economic inequality. Essentially, it explores the balance between revenue generation and public welfare.