Category: Economics
Determine incidence of tax when demand is price inelastic
From the graph, when the tax is imposed on the producer, the supply curve shits to the left from S0 to S1 (decrease in supply).The ... Read More
Problem faced when formulating perspective plan
inadequate data corruption and mismamagement inadequate funds limited skilled personel external influence dependence on foreign resource political instability Read More
Effects of trade diversion
low quality products due to low competition high prices leading to low demand High prices leading to high production limited variety/choice of goods and services ... Read More
Trade diversion
Trade diversion is a situation where as a result of economic integration, a country shifts from the importation of goods from low cost non-member state ... Read More
Trade creation
Trade creation refers to a situation where as a result of economic integration, a country shifts the consumption of goods from high cost non-member countries ... Read More
Solutions to seasonal unemployment
Diversification of economic activities. Individuals should be involved in a variety of activities as a way of increasing their employment opportunities. Promoting industrialization. Industries are ... Read More
Seasonal unemployment
Seasonal unemployment is a type of unemployment due climatic variations e.g. changes in weather, period between harvesting and planting etc. or some periods of the ... Read More
State any four features of Rostov’s drive to maturity stage of economic growth.
High degree of industrialization very low rate of population growth high level of productivity Highly developed infrastructure Use of professional labour Technological advanced ment more ... Read More
Why is it necessary to carry out development planning in your country?
Regulation of Market and Private Sector by the State in order direct resources according to plan priorities. To correct market imperfection and price mechanism because ... Read More
What measures should be taken to solve this problem of agricultural price fluctuations
Buffer stocks. The government should buy up part of the supply when output is in excess, store this surplus and later sells it to the ... Read More
Economic Chapter 15: Economic development planning
Economic development planning Economic development planning refers to the government deliberate effort (attempt) to influence, direct and control economic resources/variables to achieve the targeted (desired) ... Read More
Measures to reduce the budgetary deficits (Curb the huge public debt) in Uganda
Use of the Privatization This can help reduce on government expenditure on non performing Parastatals hence reducing the budgetary deficits. Cost sharing especially in providing ... Read More
Economic Chapter 14: Public finance and the fiscal policy
Public finance versus private finance Public finance is a science which studies the principles of allocation of government revenue and distribution of Public expenditure. It ... Read More
Ways of Clearing (Paying back) the External debt
Use of foreign exchange reserves in the central bank Selling government investments abroad. Use the export promotion strategy to increase on export and export earnings. ... Read More
Reasons for/Causes of a huge Public debt (budgetary deficits) in Uganda (LDC’s)
Low tax base. This is due to a narrow range of tax sources which limit the tax revenue. This forces the government to borrow hence ... Read More
Measure/means/Tools (methods) of Public Debt management
Debt Contraction. This refers to the act and the terms of acquiring the debt that is the nature of the debt, maturity period, conditions of ... Read More
Ways of Clearing (Paying back) the Public debt Internal debt
Obtaining fresh debts at lower interest rates to clear the old Borrowing from the central bank Obtaining a grant/foreign aid Use of co-operate profits from ... Read More
Types of Public debts
Internal debt. This is the debt contracted from within the country e.g. selling government securities to the public by the government, borrowing from the central ... Read More
Sources of Public debts
Borrowing externally from friendly countries and international organization. For example IMF and World Borrowing directly from the central bank. Borrowing from the public using the ... Read More
Roles/benefits/Objectives of the Budget as an instrument of Social and Economic development/significance of a government budget as a tool of economic policy
The budget can be used as an instrument of social and economic policy to achieve the following objectives.· To reduce income inequalities. This is done ... Read More
Reasons as to why the government may deliberately plan for a deficit budget OR. Why may the government under take Deficit financing?
To stimulate aggregate demand by increasing money supply in the economy To improve on the standards of living by increasing disposable incomes of the To ... Read More
Why may the planned budget differ from the Actual budget OR. Why is it difficult to achieve a balanced budget?
Presence inflationary tendencies in the economy which may lower the real value of 1ic planned government revenue hence a deficit budget. Occurrence of unforeseen circumstances ... Read More
Reasons as to why the government may deliberately plan for a surplus budget
Reasons as to why the government may deliberately plan for a surplus budget To check on excessive aggregate demand and to control inflation in the ... Read More
Balanced budget
Balanced budgets is a budget where the planned government revenue is equal to the planned government expenditure in a given financial year. Read More
Problems faced by the Tax authority in Uganda (LDC’s)
It is difficult to determine the taxable capacity for the tax It is difficult to determine how much tax is to be paid by each ... Read More
Unbalanced budget
Unbalanced budget is a budget where the planned government revenue is not equal to the planned government expenditure in a given financial year. Read More
Advantages and disadvantages of debt financing over taxation
Advantages (Merits) of Debt financing over Taxation financing Debt financing has a wider source of rising government revenue as compared to taxation. Unlike taxation which ... Read More
Methods (ways) of Deficit financing (Methods of financing a Deficit budget)
Borrowing internally from the public by selling bonds and treasury bills. Borrowing from the central Use of the gold reserves in the central bank to ... Read More
Ways of improving Tax revenue and Tax collection in Uganda (LDC’S)
Massive tax education. There is need to sensitize the people about the different types of taxes and the importance of paying taxes through seminars, workshops ... Read More
Problems faced by the Tax authority in Uganda (LDC’s)
It is difficult to determine the taxable capacity for the tax It is difficult to determine how much tax is to be paid by each ... Read More
Why Uganda (LDC’s) rely (depend) more on Indirect taxes than on Direct taxes
The low taxable capacity due to wide spread poverty is not suitable for direct taxes but appropriate for indirect taxes. This is because they are ... Read More
Advantages and disadvantages of indirect taxes
Advantages (Merits) of Indirect taxes They have a wider coverage. That is, they cover a variety of tax bases hence yielding more tax revenue to ... Read More
Advantages and disadvantages of value added tax (VAT)
Advantages (Merits) of VAT It is difficult to evade and avoid by the tax payer. It increases government revenue. This is because it has a ... Read More
Indirect taxes (Outlays/ Expenditure taxes)
Indirect taxes are taxes imposed on commodities where the tax incidence and tax burden can be shifted by the tax payer to other parties for ... Read More
Advantages and disadvantages of direct taxes
Advantages (Merits) of Direct taxes They are economical that is they are cheap to collect from tax payers for example pay as you earn paid ... Read More
Examples of direct Taxes
Direct Taxes are taxes imposed on income and properties of individuals and companies where by the impact and incidence of the tax cannot be shifted ... Read More
Digressive tax.
Digressive tax is the tax where the tax rate initially increases as the tax payer's income increase but becomes constant after a certain point as ... Read More
Effects of a regressive tax
Regressive This is the tax where the tax rate decreases as the income level of the tax payer increases. That is the poor pay a ... Read More
Tax incidence and elasticity of demand
(a) Elastic demand From the graph, when the tax is imposed on the producer, the supply curve shifts to the left from S0 to S1 (decrease ... Read More
Tax incidence.
Tax incidence refers to the final person who bears that tax burden. OR. It refers to the final resting position of the tax. For example ... Read More
Impact of the tax (formal incidence).
Impact of the tax (formal incidence) refers to the person who directly bears the burden of paying the tax as soon as it is imposed. Read More
Causes of a narrow Tax base in Uganda (Developing Countries)
High levels of poverty among the tax payers. Many people are poor and therefore they cannot afford to pay income tax. This greatly reduces tax ... Read More
Why people Evade paying taxes
Unfair tax assessment where by the tax administrators fix the tax without considering the income levels of tax Low income levels due to high levels ... Read More
Fiscal policy
Fiscal policy refers to deliberate government policy of using taxation, government expenditure and borrowing to regulate the level of economic activity. Tools (Instruments) of ... Read More
Objectives (Aims) of taxation (Fiscal policy) in an Economy
To rise government revenue so as to meet her recurrent and development expenditures. To achieve equitable distribution of wealth and incomes by using progressive tax ... Read More
Features /principles/Characteristics of a good tax system
b It should be comprehensive. That is it should have a wider coverage whereby a variety of taxes should be imposed on various tax bases ... Read More
Sources of public revenue
bb Taxes (Direct and Indirect taxes). This is the main source of government revenue Fines and penalties of law breakers These are paid by individuals ... Read More
Examine the factors responsible for underdevelopment in your country
Internal factors High population growth rates. This discourages savings and investment due to high dependence burden which leads to a reduction in the per capita ... Read More
Devaluation
Devaluation refers to the deliberate government policy of reducing the value of its currency in terms of other currencies. OR. It refers to the reduction ... Read More
Currency depreciation
Currency depreciation. This refers to the reduction in the value of the country's currency in terms of other currencies due to the forces of demand ... Read More
Economic Chapter 13: International trade (foreign trade)
International trade International trade refers to the exchange of commodities across the national boarders of the country. OR International trade refers to the exchange of ... Read More
Devaluation
Devaluation refers to the deliberate government policy of reducing the value of its currency in terms of other currencies. OR. It refers to the reduction ... Read More
Hard currency.
Hard currency. This refers to the currency which can easily be converted into other currencies and it is internationally recognized and accepted. For example pound, ... Read More
Exchange rate
Exchange rate refers to the value of the country’s currency in terms of other currencies. For example $1 = UG shs. 3670. Read More
Measures (Policies) of solving/correcting balance of payment problems in developing countries
The measures taken should be aimed at; (a) Increasing exports and export earnings. (b) Decreasing imports and import expenditure. port promotion policy. This policy is ... Read More
Causes of persistent balance of payment problems (Deficits) in Developing countries
Persistent balance of payment deficits are experienced by the country when its foreign exchange expenditure exceeds its foreign exchange earnings year after year. Balance of ... Read More
Balance of payments (B.O.P)
Balance of payments (B.O.P) refers to the difference between the country's total receipts from exports and total expenditure on imports in a given time. If ... Read More
Measures (solutions) to improve the Terms of trade in developing countries
bb Promote export diversification including the production of industrial products so as to avoid over flooding of the world markets by similar products produced by ... Read More
Barter (Commodity) T.O.T.
Barter (Commodity) T.O.T. This refers to the ratio of export prices to the import prices. OR. It refers to the ratio of price index of ... Read More