Economics 11 Notes for Economics Notes

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Difference Between Private And Public Finance

Private finance (individual)

Public finance ( government)

An individual adjusts his or her expenditure according to his or her income.

The public authority adjusts its income to its expenditure.

A private individual tries to have a surplus of income over expenditure i.e. surplus budget.

A public authority will spend all that it gets

An individual can borrow money from other individual only and externally

A public authority esp a state can raised loans from both internally

Finances of individuals are limited

Finances of government are flexible

Private individuals cannot use force to get their income; they cannot compel others to get income

The government can use coercive method to realize revenues

Not a single individual can print notes

A state can print currency notes in order to meet its expenditure in difficult times

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