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فصل اول بخش اول
Why
Study Public Finance?
1.1 The Four
Questions of Public Finance
1.2 Why Study
Public Finance? Facts on Government in the United States and Around the World
1.3 Why Study Public Finance Now? Policy
Debates over Social Security, Health Care, and Education
1.4 Conclusion
The Four Questions of Public Finance
•Public finance: The
study of the role of the government in the economy.
Four
questions of public finance:
1.When should the government intervene in
the economy?
2.How might the government intervene?
3.What is the effect of those
interventions on economic outcomes?
4.Why do governments choose to intervene
in the way that they do?
When
Should the Government Intervene in the Economy?
•Economics generally presumes that markets
deliver efficient outcomes, so why should government do anything?
•Primary motive for government
intervention is therefore market failure.
•Market failure: Problem
that causes the market economy to deliver an outcome that does not maximize
efficiency.
APPLICATION: The Measles Epidemic of
1989−1991
•Measles
vaccine introduced in
1963,
and measles
cases had become relatively rare in the United States by
the 1980s.
•1989−1991:
Huge resurgence
in measles.
•This
outbreak resulted
from very low immunization rates among disadvantaged inner-city youths.
•Unimmunized
children
imposed
a negative
externality on other children.
•The
federal government responded to this health crisis in the early 1990s:
oEncouraged parents to immunize
their children.
oPaid for the vaccines for low-income families.
•Impressive
results:
•Immunization rates never
higher than 70% prior to outbreak.
•Rose to 90% by 1995.
•Government
intervention
clearly reduced this negative externality.
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