FINAL REVISION(Public Finance and taxation)Define: Public finance, fiscal policy, mixed economic system, purely market system, purely command system, program budget, incremental budget, taxes, Value added taxes, Excise taxes. (EGBARY)Public Finance:field of economics that studies government activities that requires expenditures and alternative means of financing. It is a branch of economics that studies the government activities using public expenditures and public revenues. Descriptive study that is concerned with theoretical study of tools of fiscal policy (meaning, structure, size objectives) Fiscal policy:it’s concerned with applied side of public finance and how much policies can affect the economy which is made by the policy maker (minister of finance)oTo control level of economic activities: the economic activities usually fluctuating reflecting sometimes increase in inflation or increase in recession or even unemployment so the government can control this fluctuation through fiscal policy. Such as revenues (decrease taxes to motivate individual spending and people can pay the imposed tax) and expenditures (increase the spending on the infrastructure and provide the security to motivate private sector to invest them unemployment to decrease. oTo provide essential goods and services: goods which private sector can’t or doesn’t care to provide such as (education, security, healthcare) Goods can be public( roads, streets, safety) or merit goods (education and health care)oTo affect the allocation of resources:government need to encourage some activities as small projects by reducing taxes in income and provide grants and subsides. oTo redistribute income among people:Progressive tax: tax on income, capital gain and inheritance is taken progressively which means the government put income, capital gain and inheritance in categories.Transfer payment: such as supplementary benefits forming income supplement. Giving more people better educationMixed Economic system :Share of governmentShare of private Size of government revenues of expandIt’s a combination of both markets and common economy since part of resources and factors of production are owned by the state and another part is owned by individuals The share of government and private depend on each country and each stage.