ii THE ROLE OF GOVERNMENT POLICY SITI ASLIDAH BINTI ARIFFIN NURHAWANI BINTI YAACOB MUHAMMAD SHAHRIL BIN GHAZALI POLITEKNIK KOTA BHARU
iii Published and printed by: Department of Commerce Politeknik Kota Bharu KM 24 Kok Lanas, 16450 Ketereh, Kelantan. www.pkb.edu.my THE ROLE OF GOVERNMENT POLICY First Edition 2023 © 2023 SITI ASLIDAH BINTI ARIFFIN, NURHAWANI BINTI YAACOB, MUHAMMAD SHAHRIL BIN GHAZALI ` All rights reserved. No part of the publication may be reproduced or stored in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission of the copyright holder. Siti Aslidah, Nurhawani & Muhammad Shahril The Role of Government Policy/ Siti Aslidah, Nurhawani & Muhammad Shahril
iv ACKNOWLEDGEMENTS This e-book would not have been possible without the support of the Head of Commerce Department, Politeknik Kota Bharu, Mdm. Juli Suzlin binti Mohd Jalaludin, and the Head of the Diploma in Business Studies Programme, Politeknik Kota Bharu, Mdm. Nurhawani binti Yaacob and E-Learning Coordinator, Commerce Department, Mdm. Che Rugayah binti Che Ismail. We are grateful to all of those with whom we have had the pleasure to work during the completion of this e-book. We would like to thank our family, whose love and guidance provide unending inspiration.
v AUTHORS BIBLIOGRAPHY Siti Aslidah binti Ariffin is a lecturer at the Commerce Department, Politeknik Kota Bharu. She obtained a Master of Human Capital with honours from the Universiti of Malaysia Sabah. She also holds a Bachelor of Economics with honours from the Universiti of Malaya, Kuala Lumpur. She has taught various subjects such as Macroeconomics, Microeconomics, and Human Resource Management. She has an experienced 15 years in learning and teaching. She can be contacted at [email protected] Nurhawani binti Yaacob is a Head of the Diploma in Business Studies Programme and a lecturer at the Commerce Department, Politeknik Kota Bharu. She obtained a Bachelor of Economics with honours from the Universiti Kebangsaan Malaysia, Selangor Darul Ehsan. She has taught various subjects such as Macroeconomics, Microeconomics, and Principles of Management. She has an experienced 17 years in learning and teaching. She can be contacted at [email protected] Muhammad Shahril bin Ghazali is a lecturer at the Commerce Department, Politeknik Kota Bharu. He obtained a a Bachelor in Education (Entpreneurship and Commerce) with honours from the Sultan Idris Education University, Perak Darul Ridzuan. He has taught various subjects such as Macroeconomics, Digital Entrepreneurship and Principles of Marketing. He has an experienced 3 years in learning and teaching. He can be contacted at [email protected]
vi SYNOPSIS Economic conditions often inform the policy changes that governments elect to enact. Specifically in Malaysia, government policy has always had a large amount of influence on economic growth, the creation of new business entities, and the success of financial markets. Macroeconomic policy refers to the government’s actions to regulate a nation’s economic operations that support robust and sustained economic growth, which is essential for raising living standards, creating jobs, and creating wealth. The three primary macroeconomic concerns are national production, unemployment, and inflation. These are components that can be modified with the use of macroeconomic policies. Macroeconomic policy aims to provide a stable economic environment that is conducive to fostering strong and sustainable economic growth. The key pillars of macroeconomic policy are fiscal policy, monetary policy, and direct control policy. The government may decide to regulate some aspects of economic activity in order to engineer economic growth or prevent negative economic conditions in the future. In general, a government's active role in responding to and influencing the economic circumstances of a country is for the purpose of preserving and furthering the economic interests of the public.
vii TABLE OF CONTENTS AUTHORS BIBLIOGRAPHY v SYNOPSIS vi TABLE OF CONTENT vii LIST OF FIGURE viii 4.1.1 Types of government budgets 1 4.1.2 Sources of government revenue 2 4.1.3 Types of government expenditure 5 4.1.4 Public debt 8 4.2.1 Government policy 10 4.2.2 Types of government policy 11 4.2.3 Tools of government policy 13 EXERCISE 1 17 Types of budget 17 Sources of government revenue 18 Sources of government expenditure 19 Public debt 20 Government policy 22 ANSWERS 24 REFERENCES 25
viii LIST OF FIGURE Figure 1: Budget of Development Expenditure 2003-2004............................................... 7 Figure 2: Commercial Banks in Malaysia.................................................................................9 Figure 3: Types of Fiscal Policy..................................................................................................12 Figure 4: Tools of Fiscal Policy................................................................................................... 13 Figure 5: Flow of Bank Reserve ................................................................................................. 14
1 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.1.1 Types of government budgets A government budget is an annual financial statement that outlines the estimated government expenditure and expected government receipts or revenues for the forthcoming fiscal year. Depending on the feasibility of these estimates, budgets are of three types -- balanced budget, surplus budget, and deficit budget. Mentioned below are brief explanations of these three types of budgets: i. Balanced Budget A government budget is said to be a balanced budget if the estimated government expenditure is equal to expected government receipts in a particular financial year. Government revenues mostly include taxes while expenditures consist of government spending ii. Surplus Budget A government budget is said to be a surplus budget if the expected government revenues exceed the estimated government expenditure in a particular financial year. This means that the government’s earnings from taxes levied are greater than the amount the government spends on public welfare. iii. Deficit Budget A government budget is said to be a deficit budget if the estimated government expenditure exceeds the expected government revenue in a particular financial year. The government covers this amount through public borrowings (by issuing government bonds) or by withdrawing from its accumulated reserve surplus.
2 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.1.2 SOURCES OF GOVERNMENT REVENUE I. Tax revenue: Tax is the compulsory payment paid by the people to the government. The taxpayer does not get direct benefits while paying taxes, but they may get indirect benefits from various services provided by the government. Tax revenue is two types: a) Direct tax: If direct tax is levied on someone then the burden can’t be shifted to others so, direct taxes are non-transferable. Generally, direct taxes are imposed on the income and property of a person. The main sources or components of direct taxes are: * Land revenue and registration tax: The government charges tax on the purchase of land and house. * Property, profit & income tax: Government charges a certain amount of tax on income, property & profit, or the general people.
3 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) b) Indirect tax: If tax is levied on goods and services and the burden of tax can be shifted from one person to another then, it is called an indirect tax. The producer can shift the burden of tax to ultimate consumers by raising the price of commodities. The main sources of a component of indirect tax are: * Custom duty: The government can collect revenue by imposing a tax on the import and export of goods and services. * Tax on consumption & production of goods and services: Government can collect revenue by imposing a tax on the consumption and production of goods and services such as excise tax, entertainment tax, and value-added tax.
4 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) II. Non-tax revenue: The income received by the government from various sources other than tax is known as non-tax revenue. There are various sources of non-tax revenue which are: a) Fees: for the granting of regulations or issuance of permits or licenses. Examples include vehicle registration plate permits, vehicle registration fees, driver's licenses, hunting and fishing licenses, fees for visas or passports, fees for demolition, rezoning, and land grading, and cutting-down healthy trees. b) Receipts from the sale of government commodities & services: It consists of income from drinking water, irrigation, electricity, education, etc. c) A special levy: Also known as a special assessment, is money that is paid by the owner of a strata lot to help pay for shared common expenses related to the building or complex. d) Fines and penalties: People pay a large amount of money to the government in the form of fines and penalties. e) Principal and interest payment: It consists of the repayment of principal and interest on debt by the corporations to the government. f) Royalty and sale of fixed assets: It includes the income received from mine royalty and sales of mine and governmentfixed assets such as land, and buildings.
5 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.1.3 Types of government expenditure Government Expenditure: Government expenditure refers to the expenditure made by the government and its various agencies for the promotion of public welfare. The sources of government expenditure are classified under two headings which are as follows: 1. Operating or Management expenditure: Expenditure made on normal government services or administrative functions is called regular expenditure. It is related to expenditure on day-to-day activities like payment of salaries, pension, payment of interest, and principal for external and internal debt. The regular expenditure consists of the following headings: a) General Administration: Salaries and emoluments are the largest expenditure component followed by supplies and services. Pension payments are made to pensioners for their welfare. b) Supplies and services: It includes travel allowance, postage and stamp, fax and telephone, stationery and computer maintenance, and furniture. A transfer payment is a payment by the government to individuals which does not involve any change of goods and services. There are other headings of regular expenditure such as revenue administration, economic administration & planning, judicial administration, foreign services, economic services, loan and investment, loan repayment and interest, insurance, rentals, and miscellaneous.
6 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 2. Development & capital expenditure: Expenditure made on the development activities is called development expenditure. It is related to long-term expenditure on development programs. The development consists of the following headings: a) Defence and security: It is used for infrastructure and military base development, weapon procurement, military research and development, military aid, and others. b) Social services: It includes the expenditure made on the development of education, drinking water and health. c) Economic services: These include the expenditure made on planning & statistics of a nation. Includes the provision of agricultural and rural development, trade and industry, transport, public utilities, and others.
7 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) d) General administration: It is the smallest portion of the total development expenditure. It includes renovation, refurbishment, and maintenance of government facilities such as government buildings, judicial courts, and others. Multipurpose Hall (Before renovate) House Block (Multipurpose Hall which has been renovated and upgraded) Figure 1: Budget of Development Expenditure 2003-2004
8 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.1.4 PUBLIC DEBT ● Public debt is the sum of the borrowings of the Central/Federal government of a country. We also call it Sovereign debt or National debt. There are multiple sources of public debt. ● Governments across the world borrow through these sources to meet their expenses for day-to-day operations as well as for the development of the nation. The amount of public debt of a country tells a lot about its financial health and stability. ● The expenditures of all the governments mostly exceed their income. In other words, the budgets of most governments have a budget deficit. Hence, they must rely upon various sources of public debt to meet the budget deficit. ● We often classify public debt by the time of its repayment like for nongovernment firms. A debt of one year or lesser is known as short-term debt. However, the debts for which the repayment period goes beyond one year but for less than ten years are generally called a Medium-Term Debt. ● While in the case of Long-Term Debts stretch beyond 10 years and can go up to 25 to 50 years. The governments must pay interest on such debts. Short-term debts generally have a higher rate of interest, and hence are costly. Long-term debts have the lowest rates of interest. Sources of Public Debt A government can raise debt either internally from domestic sources or go beyond the boundaries of the nation for external debt. Debt can be from individuals, organizations and businesses, financial institutions, and even other governments. The most common sources of public debts are: I. Internal Sources Internal sources of public debt include borrowing from individuals, banks, and financial institutions within the country.
9 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) i. Borrowing from citizens through the sale of securities, bonds and saving certificates to citizens. ii. Borrowing from financial institutions such as insurance companies by investing their resources in the purchase of government securities. iii. Loans from the central bank, where the central bank purchases government securities, bonds and debentures from the government. iv. Loans from commercial banks, where the commercial banks invest a part of their deposits in government bonds and securities to fulfil liquidity requirements. Figure 2: Commercial Banks in Malaysia II. External Sources External sources of public debt include borrowing from foreign governments, international financial institutions, and foreign private lenders. a. International money markets, such as some foreign exchange banks in Paris, London and New York, which have big deposits to lend any government requesting loans. b. Currency loans from foreign governments, such as the USA, UK, Germany and Japan, for the supply of needed goods. The loans are documented in contracts. c. Loans from international monetary financial institutions, such as the International Monetary Fund (IMF) which gives loans to its members on a short-term basis and the World Bank which gives long-term loans for economic development at a reasonable interest rate.
10 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.2.1 GOVERNMENT POLICY Government's policy is a rule or principle that hopefully better guides decisions, resulting in positive outcomes that enhance the community or unit. Government policies contain the reasons things are to be done in a certain way and why. This leads to the development of procedures and protocols to see that policies are conducted in an appropriate manner. i. FISCAL POLICY Fiscal policy is defined as the policy under which the government uses the instrument of taxation, public spending and public borrowing to achieve various objectives of economic policy. Fiscal policy is the use of government revenue collection and expenditure to influence a country's economy. ii. MONETARY POLICY Monetary policy refers to central bank activities that are directed toward influencing the quantity of money and credit in an economy. Central banks have four main monetary policy tools: the reserve requirement, open market operations, the discount rate, and interest on reserves. Most central banks also have a lot more tools at their disposal. Here are the four primary tools and how they work together to sustain healthy economic growth. iii. DIRECT CONTROL POLICY A control that is directly imposed upon the manufacturing, pricing, and distribution of specific goods in contrast with an indirect or general control (such as credit and fiscal policy) that affects the economy in its entirety and specific goods only indirectly. Direct controls are imposed by the government which expressly forbid or restrict certain kinds of investment or economic activity. Sometimes, direct government controls over prices and wages as a measure against inflation have been advocated and implemented.
11 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.2.2TYPES OF GOVERNMENT POLICY I. FISCAL POLICY a. Discretionary fiscal policy The government makes changes to tax rates and or levels of government spending. i. Expansionary Fiscal Policy ● Expansionary fiscal policy is where the government spends more than it takes in through taxes. This may involve a reduction in taxes, an increase in spending, or a mixture of both. In turn, it creates what is known as a budget or fiscal deficit. ● During recessionary periods, a budget deficit naturally forms. This is because unemployment tends to increase, meaning lower income from tax receipts which generally account for half of the government revenue. At the same time, governments want to ensure full employment. ● It is therefore faced with a tough decision between increasing the budget deficit further or trying to fight the recession. At the same time, governments are equally forced to pay higher amounts in unemployment and other social security benefits, thereby increasing government spending, whilst tax revenues fall. ● Expansionary fiscal policy uses lower taxes and/or higher spending to ultimately boost prosperity and economic growth. By reducing taxes, consumers have more money in their pockets to go out, spend, and stimulate the economy. ii. Contractionary fiscal policy ● Contractionary fiscal policy is where the government collects more in taxes than it spends. A government may wish to do this for several reasons. primarily, it is used to help stem inflation. ● For instance, the more governments tax, the less disposable income consumers have. In turn, this reduces aggregate demand which may seem like a bad thing, but it helps reduce inflation. So, a contractionary fiscal policy will take money away from consumers. ● Consequently, they demand less from individual businesses. This then sends a signal to those businesses that demand is starting to decline. So, they stop raising prices so quickly, thereby reducing the rate of inflation. With that said, governments may wish to impose a contractionary policy to reduce or control their debt. Although we have discussed lower taxation, governments can also resort to lower spending otherwise known as austerity to do so.
12 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) Figure 3: Types of Fiscal Policy b. Non-discretionary fiscal policy ● The non-discretionary fiscal policy consists of policies that are built into the system so that an expansionary or contractionary stimulus can be given automatically. ● The welfare state and the progressive income tax serve as built-in policies. Nondiscretionary fiscal policy, as the word suggests, is not at the discretion of the government. ● For example, progressive taxation pushes people into higher income tax brackets during boom times, substantially increasing their tax bills and reducing government budget deficits (or increasing government surpluses). II. MONETARY POLICY There are two main kinds of monetary policy: contractionary and expansionary. Contractionary monetary policy: This type of policy is used to decrease the amount of money circulating throughout the economy, typically by selling government bonds, raising interest rates, and increasing the reserve requirements for banks. III. DIRECT CONTROL POLICY A control that is directly imposed upon the manufacturing, pricing, and distribution of specific goods in contrast with an indirect or general control (such as a credit and fiscal policy) that affects the economy in its entirety and specific goods only indirectly. Direct controls over prices and wages as a measure against inflation have been advocated and implemented.
13 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4.2.3TOOLS OF GOVERNMENT POLICY I. TOOLS OF FISCAL POLICY Figure 4: Tools of Fiscal Policy II. TOOLS OF MONETARY POLICY i) Need for Statutory Reserves Requirement The reserve requirement refers to the money banks must keep on hand overnight. They can either keep the reserve in their vaults or at the central bank. A low reserve requirement allows banks to lend more of their deposits. It's expansionary because it creates credit.
14 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) ii) Minimum Liquidity Requirement The liquidity coverage ratio is the requirement whereby banks must hold an amount of high-quality liquid assets that's enough to fund cash outflows for 30 days. Commercial banks must keep liquidated assets issued by Bank Negara Malaysia (BNM) such as treasury bills and government securities. Figure 5: Flow of Bank Reserve iii) Open Market Operations Open market operations are when central banks buy or sell securities. These are bought from or sold to the country's private banks. When the central bank buys securities, it adds cash to the banks' reserves. That gives them more money to lend. When the central bank sells the securities, it places them on the banks' balance sheets and reduces its cash holdings. The bank now has less to lend. A central bank buys securities when it wants an expansionary monetary policy. It sells them when it executes tight monetary policy.
15 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) iv) Discount Rate The discount rate is the rate that central banks charge their member banks to borrow at their discount window. Because it's higher than the fed funds rate, banks only use this if they can't borrow funds from other banks. Using the discount window also has a stigma attached. The financial community assumes that any bank that uses the discount window is in trouble. Only a desperate bank that's been rejected by others would use the discount window. v) Interest Rate Interest on reserves also supports the fed funds rate target. When you borrow money, interest is the cost of doing so and is typically expressed as an annual percentage of the loan (or amount of credit card borrowing). When you save money it is the rate your bank or building society will pay you to borrow your money. The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. Figure: Difference between Monetary Policy and Fiscal Policy.
16 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) III. TOOLS OF DIRECT CONTROL POLICY The wages are important because they influence the labour market, which in turn influences the total production in the economy. Wage control method is a government measure usually undertaken to control inflation. When the government imposes a limit on the rise of wages by a certain percentage or an amount to both public and private sectors, it is known as wage control. Direct controls involve imposing quotas or even outright bans (embargoes) on imports. These directly cut or prevent expenditure on imports and, as a result, people switch their spending from foreign to home-produced goods. A government may impose a tariff or increase an existing tariff on imports. This will encourage domestic consumers and firms to switch to buying domestic products.
17 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) EXERCISE 1 TYPES OF BUDGET 1. When expenditure exceed tax revenue the government has and when tax revenue exceeds expenditure the government has a . A. budget surplus, budget debt B. balance budget, budget deficit C. budget deficit, budget surplus D. budget surplus, budget deficit 2. Which of the following refers to the government budget deficit? A. The government expenditure is negative B. Government revenue is more than government expenditure C. The government total expenditure exceeds government revenue D. The government total expenditure equals to government revenue 3. The balance budget occurs when A. the public debt deceases B. the government total expenditure equals revenue C. tax collection is more than government expenditure D. the government total expenditure exceeds revenue 4. The deficit budget occurs when . A. the public debt deceases B. the government’s total expenditure equals revenue C. tax collection is more than government expenditure D. the government’s total expenditure exceeds revenue
18 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 5. The surplus budget occurs when . A. the public debt deceases B. the government’s total expenditure equals revenue C. tax collection is more than government expenditure D. the government’s total expenditure exceedsrevenue SOURCES OF GOVERNMENT REVENUE 1. All the following are examples of non-tax revenue EXCEPT . A. services tax B. fee and penalties C. petroleum royalty D. licenses and permits 2. Petroleum income tax and stamp duties are two examples of the government revenues. The revenues fall under which category? A. Direct taxes B. Indirect taxes C. Non-tax revenues D. Non-revenue receipts 3. All the following are the examples of indirect tax EXCEPT . A. Stamp duty B. Service tax C. Export duties D. Excise duties
19 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 4. Which of the following is non-tax revenue? I. Services tax II. Sale of government assets III. Fees of license and permit IV. Rental of government property A. I, II and III B. I, III and IV C. II, III and IV D. I, II, III and IV 5. In Malaysia, the biggest contributor of sources of government income is . A. income tax B. indirect taxes C. petroleum tax D. sales and service tax SOURCES OF GOVERNMENT EXPENDITURE 1. Government development expenditure is focused on . A. improve facilities in the physical infrastructure B. securing efficient allocation of economic resources. C. maintaining a continuously low structure of interest rate D. expenses of operating and administering government departments. 2. Emolument, pension and gratuities, and subsidies are the examples of . A. tax revenue. B. non tax revenue. C. government operating expenditure D. government development expenditure
20 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 3. “Government expenditure focuses on infrastructure public transport, communication networks, develop public utilities, boost commercial and industrial activities.” – Budget 2022. The above government expenditures are categorized in . A. economic B. social services C. security and defence D. general administration 4. Government operating expenditure consists of . A. subsidies B. stamp duties C. fee and penalties D. pension and gratuities 5. Security and defence expenditure, economic and social services fall under . A. operating expenditure B. other national expenses C. development expenditure D. operating and development expenditure PUBLIC DEBT 1. Public debt is defined as A. government investment in development projects B. government spending in various government department C. government revenue is more than government expenditure D. government borrowing the money to finance the budget deficit
21 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 2. Government borrowing from citizens through . A. taxes implementation B. selling securities, bonds and certificates C. investment in long term loans from foreign country D. purchases government securities, bond and debentures 3. All the following are the internal sources of public borrowing EXCEPT . A. loans from the central bank B. loans from commercial banks C. borrowing from financial institutions D. loans from the international money market 4. National debt from internalsources are all the following EXCEPT A. borrowing from citizens through sale of securities B. insurance companies by investing of government securities C. sales of government securities in the international financial markets D. investment certificates and government securities to the employees 5. Externalsources of public borrowing include . i. Loans form commercial bank ii. Loans from foreign government iii. Borrowing from financial institutions iv. Loans from international money market A. i and ii B. i and iv C. ii and iii D. ii and iv
22 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) GOVERNMENT POLICY 1. The government implements the expansionary fiscal policy by . A. increasing government taxes and increasing government expenditure B. increasing government taxes and decreasing government expenditure C. decreasing government taxes and increasing government expenditure D. decreasing government taxes and decreasing government expenditure 2. The expansionary monetary policy is . A. increases government expenditure B. decreases government expenditure C. decrease money supply in the economy D. increases money supply in the economy 3. Tools of fiscal policy include . A. personal income tax B. rate of interest on deposits C. taxes and reserves requirement D. taxes and government expenditure 4. Which of the following is a monetary policy tool used to overcome inflation . A. decrease discount rate B. increase personal income tax C. increase reserves requirement D. increases government expenditure
23 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) 5. All the following are the action taken by government to overcome unemployment EXCEPT . A. decrease discount rate B. decrease reserve requirement C. increase government expenditure and decrease tax D. decrease taxes and decrease government expenditure
24 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) ANSWERS TYPES OF BUDGET 1. C 2. C 3. B 4. D 5. C SOURCES OF GOVERNMENT REVENUE 1. C 2. A 3. A 4. C 5. A SOURCES OF GOVERNMENT EXPENDITURE 1. A 2. C 3. A 4. D 5. C PUBLIC DEBT 1. D 2. B 3. D 4. C 5. D GOVERNMENT POLICY 1. C 2. D 3. D 4. C 5. D
25 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) REFERENCES Alex M. Thomas·(2021). Macroeconomics: An introduction. Cambridge University Press. David C. Colandor. (2016). Economics. McGraw-Hill Education. Deviga V. & Karunagaran M. (2013). Principles of Economics. 3rd Edition Oxford: Fajar Bakti Sdn Bhd. Gordon, R. J. (2012). Macroeconomics. Boston: Pearson/Addison-Wesley. Sarimah Aman Shah and Abd Rashid Mohd Ali(2017) Principles of Economics 3rd Edition Oxford: Fajar Bakti Sdn Bhd. Sarimah Aman Shah and Abd Rashid Mohd Ali (2022). Macroeconomics. SJ Learning.
26 | M A C R O E C O N O M I C S ( R O L E O F G O V E R N M E N T P O L I C Y ) POLITEKNIK KOTA BHARU KM 24, KOK LANAS 16450 KETEREH KELANTAN