Which Factor Government Need To Consider If Income Is Less Than The Expenditure?

What factors affect government spending?

The first factor is the size of the deficit the government has. This is essentially tax income minus spending; the larger the defcit the less likely the government is to spend. This means the second factor is how willing the government is to borrow, which increases the national debt.

How do you balance your income and expenses you have a very limited income?

1. Step 1: Know Your Income & Expenses.
2. Step 2: Track Your Money.
3. Step 3: Compare your total expense with your total income.
4. Step 4: Check Your Expenses Again.

What are the factors to be considered before providing a financial assistance to a certain community?

• Political (Citizen) Involvement. ...
• Economic Influences. ...
• Social and Demographic Change. ...
• Legal and Intergovernmental Matters.

When the government spending exceeds the tax revenue is known as?

When the outlay of a government (i.e., the total of its purchases of goods and services, transfers in grants to individuals and corporations, and its net interest payments) exceeds its tax revenues, the government budget is said to be in deficit; government spending in excess of tax receipts is known as deficit ...

What are the 3 types of budgeting?

Depending on these estimates, budgets are classified into three categories- balanced budget, surplus budget and deficit budget .

What are the factors of government?

• Involvement of Government agencies;
• Land tenure issues and perceptions;
• Involvement of local people in the decision making and employment opportunities;
• Quality and consistency of forest management;
• Expectations created by the development of cash economies in areas where these did not previously exist;

Why should government spending be decreased?

Federal spending cuts would spur economic growth by shifting resources from lower-valued government activities to higher-valued private ones. Cuts would expand freedom by giving people more control over their lives and reducing the regulations that come with spending programs.

What are the political factors?

Political factors relate to how the government intervenes in the economy . Specifically, political factors have areas including tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability.

How do you balance your income?

1. Understand the budgeting process.
2. Try a simple budgeting plan.
3. Allow up to 50% of your income for needs.
4. Leave 30% of your income for wants.
5. Commit 20% of your income to savings and debt repayment.

What factors to consider in preparing a family budget explain each factor that you have stated?

• Your Income Structure. The way in which money comes into your income statement is critical for planning cash flow. ...
• Your Spending Habits. ...
• Your Use (or Not) of Credit & Debt. ...
• Your Tech Savvy. ...
• Your Personality.

What are three important factors to consider when developing a budget?

The factors to consider when budgeting for a business are the company’s current financial situation, available funds and revenue streams, business goals and the outlook for the industry you’re operating in .

What is income balancing?

The income statement gives your company a picture of what the business performance has been during a given period, while the balance sheet gives you a snapshot of the company’s assets and liabilities at a specific point in time.

How are governments financed?

The federal government collects revenue from a variety of sources, including individual income taxes, payroll taxes, corporate income taxes , and excise taxes. It also collects revenue from services like admission to national parks and customs duties.

Why local government finance is important?

Why is Local Government Finance Important? The potential importance of local government finance is based on two main pillars. The core rationale is that local governments are well positioned to improve how public resources are used and the extent to which diverse citizen needs are satisfied .

When the government’s expenditures are less than tax revenues?

If government expenditures are greater (less) than tax revenues, the federal government runs a budget deficit (surplus). If government expenditures are equal to tax revenues, the federal government runs a balanced budget. In 2013, the federal government ran a budget deficit of $973 billion.

What are the major components of government outlays?

• Government consumption are government purchases of goods and services. ...
• Transfer payments are government payments to individuals.

What is the source of reliable income for the government?

Source of Tax Revenue

The government generates its revenue from taxes and several other non-tax revenue sources. Tax is one of the major sources of revenue for the government to carry out its work.

What type of tax is income tax?

The U.S. federal income tax is a progressive tax system . Its schedule of marginal tax rates imposes a higher income tax rate on people with higher incomes, and a lower income tax rate on people with lower incomes. The percentage rate increases at intervals as taxable income increases.

What is the government budget?

A government budget is a document prepared by the government and/or other political entity presenting its anticipated tax revenues (Inheritance tax, income tax, corporation tax, import taxes) and proposed spending/expenditure (Healthcare, Education, Defence, Roads, State Benefit) for the coming financial year.

What is Indian government budget?

Definition: According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year .

What are the 5 major sources of revenue for the government?

In accordance with this system, the revenue of the central government includes tariff, consumption tax and value added tax levied by the customs, consumption tax, income tax of the enterprises subordinate to the central government, income taxes of the local banks, foreign-funded banks and non-bank financial ...

What is the most common factor for development?

Economists generally agree that economic development and growth are influenced by four factors: human resources, physical capital, natural resources and technology . Highly developed countries have governments that focus on these areas.

What factors limit the powers of government?

• Constraints on Government Powers (Factor 1)
• Absence of Corruption (Factor 2)
• Open Government (Factor 3)
• Fundamental Rights (Factor 4)
• Order and Security (Factor 5)
• Regulatory Enforcement (Factor 6)
• Civil Justice (Factor 7)
• Criminal Justice (Factor 8)

What is decrease government spending?

Contractionary policy involves a decrease in government spending, an increase in taxes, or a combination of the two. It leads to a left-ward shift in the aggregate demand curve.

What is reduced government spending?

Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. ... Austerity measures are often used by governments that find it difficult to borrow or meet their existing obligations to pay back loans.

What is internal factor?

Definition. The internal factors refer to anything within the company and under the control of the company no matter whether they are tangible or intangible. These factors after being figured out are grouped into the strengths and weaknesses of the company.

What are some examples of economic factors?

Economic factors may include costs such as wages, interest rates, governmental activity, laws, policies, tax rates, and unemployment . All of these factors occur outside of the business or investment itself, but they heavily influence the value of the investment in the future.

What are some examples of income and expenses?

(1) Cost of the goods sold during the ordinary course of business . (2) Wages and salaries, repairs and maintenance, rent and rates, heating and lighting, telephone, insurance, etc. (3) Commission payable, interest payable, bank charges, etc.

How does less government spending affect the economy?

Government spending reduces savings in the economy , thus increasing interest rates. This can lead to less investment in areas such as home building and productive capacity, which includes the facilities and infrastructure used to contribute to the economy’s output.

What is social factor?

Social factors represent another important set of influences on consumer behavior . Specifically, these are the effects of people and groups influencing one another through culture and subculture, social class, reference groups, and family.

How do you calculate expenses?

Subtract the net income or net loss from total revenue to calculate total expenses. Treat a net loss as a negative number in your calculation. Concluding the example, subtract $100,000 from $500,000 to get $400,000 in total expenses.

How do you calculate expenses on an income statement?

Therefore, the formula for calculating net income is revenues subtract expenses . Rearranging the equation, if we know total revenues and net income, we can calculate total expenses by taking total revenues and subtracting net income.

Is income and expense the same as profit and loss?

There is no difference between income statement and profit and loss. An income statement is often referred to as a P&L. The income statement is also known as statement of income or statement of operations. ... income statement are actually the same, the terms will be used interchangeably throughout this article.

What is commerce accounting?

What Is Accounting? Accounting is the process of recording financial transactions pertaining to a business . The accounting process includes summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities.

How does expense affect balance sheet?

Accrued expense. ... When expenses are accrued, this means that an accrued liabilities account is increased , while the amount of the expense reduces the retained earnings account. Thus, the liability portion of the balance sheet increases, while the equity portion declines.

What factors may result in a decreased budget?

Changes in the Market

Even if you have no increases in production costs, wages, marketing or general and administrative expenses, you can face a budget shortfall if your percentage of the market declines.

What factors affect the family budget?

• Availability of Money: ...
• The size and the composition of the family: ...
• Stages of family life cycle: ...
• Occupation of the family members: ...
• The needs and objectives of the family: ...
• Resources: ...
• Locality of the family: ...
• Socio-economic status of the family:

What are the basic considerations in making family budget?

To create a budget, first, identify important goals you want to achieve that require money. Next, prioritize your monthly spending, from necessary to trivial . Next, add your net income and subtract expenses. Finally, adjust your planned spending or consider additional income as necessary.

Which factor to be considered in budgeting?

Income. The first important factor in preparing a budget is your income . When preparing a budget you need to focus on your net income, not gross. The amount of money you take home each month is what you use to pay your obligations.

What are the factors to budget?

• Housing (25-35 percent) ...
• Transportation (10-15 percent) ...
• Food (10-15 percent) ...
• Utilities (5-10 percent) ...
• Insurance (10-25 percent) ...
• Medical & Healthcare (5-10 percent) ...
• Saving, Investing, & Debt Payments (10-20 percent) ...
• Personal Spending (5-10 percent)

What is one important factor to consider when preparing a production budget?

When preparing a production budget, an important consideration to bear in mind is the firm’s inventory policy . The sales budget is the foundation for the production budget, with adjustments for the starting and ending inventory. Production budgets, similar to sales budgets, are developed on a unit basis.