(a) What are the sources of government revenue? (b) How does a government finance its...
ECONOMICS
WAEC 2006
(a) What are the sources of government revenue?
(b) How does a government finance its budget deficit?
Explanation
(a) Sources of Government Revenue are:
(i) Taxation: Income tax, property tax, export and import duties, excise duty, amongst others.
(ii) Sale of government assets.
(iii) Fees, licensees and other specific charges.
(iv) Royalties and rents.
(v) grants and aids from other countries.
(vi) Profits from direct investments and public enterprises.
(vii) Money recovered from corrupt officials. (viii) Borrowing.
(b) A government finances its budget deficit through
(i) Internal and external borrowing.
(ii) Printing of currency.
(iii) Sale of government property.
(iv) Aids and donations.
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