QUESTION ONE

In a mixed economy, two of the objectives of a government could be;

 (a) To minimise its borrowing requirements; and

(b) To reduce the taxation of incomes.

 Required

(a) Identify the general economic effects of these policies on private sector businesses.

(b) Discuss what particular effects might result from attempts to achieve these objectives by each of:

 (i) Reductions in public expenditure;

(ii) Increases in charges made for the products or services of nationalised industries;

(iii) Selling nationalised assets.

 QUESTION TWO

Outline how a major refurbishment of publicly funded hospital facilities might affect the Public Sector Borrowing Requirement.

Discuss and give examples of how governments assist companies in their financing requirements.

 QUESTION THREE

The problem with selling off profitable publicly owned undertakings is that in the long term government, and therefore the taxpayer, loses out by forfeiting the future stream of profits.

Required:
Discuss briefly the validity of the above statement.