Macroeconomic (DBF 106)
Assignment 1 :
with that face?
There’s no jokes,
so why should I
The Federal government will record a lower 4% fiscal deficit of
GDP in 2013. With a higher tax revenue of RM 159.2 billion., the
Federal Revenue is expected to reach RM 208.7 billion whereas
total expenditure is projected to reduce by 1.1% lower fiscal
deficit. Non-tax revenue is expected to be RM 49.5 billion, a 9.6%
reduction- mainly due to lower investment income returns,
petroleum royalties income and the Malaysia-Thailand Joint
Honestly daddy, I would like to
know about this kind of thing.
But, I don’t really
understand, what are you
talking about just now.
Are you joking?
What are you
Hello mommy. Actually I have
no idea what’s daddy talk
about. Something about tax
revenue. I would like to know.
What’s that suppose to mean
Actually darling, it’s all about
the role of government. A
government can obtain
revenue from many sources.
That thing you say just now
is some of the sources of
revenue. The major portion
of the revenue is from taxes.
they just receive
the revenue from
tax whatsoever? Do
Of course they spends. There are
two types of government
expenditure. One is operating
expenditure and other one is
What is so
re in the
Broadly speaking, fiscal
policy is the use of
taxation and government
spending for the
When governments increase their spending,
crowding out can occur – government
spending reduces available funds and
increases the cost of capital, leading many
businesses to abandon expansion projects.
Likewise, when a government spends in
excess of receipts (a deficit) and must
borrow funds to finance that deficit,
crowding out can occur.
Likewise, taxation causes problems of its
own. Taxes shift the equilibrium for goods and
services away from its optimal level, therefore
reducing consumer and producer surpluses.
This reduction is called the deadweight loss
and it basically represents the net benefit that
is being sacrificed by society because of the
presence of the tax.
NOO!! Why is this so
It’s okay, you still a kid
though. No need to take this
seriously. It’s absolutely
amazing when a kids like
you interested in this. I’m
proud of you daughter.
Ermm, one more thing. I
just want to know, what
is the government
Okay, let me see. Like I
mentioned just now, there
are two types of
expenditure. Operating and
What with the
Operating expenditure is the
government expenditure allocated to
cover the expenses of operating and
departments. It consist of emolument,
pensions and gratuities, debts, service
charges, supply and service, subsidies
and other type of expenditures.
Really? Wow. And how
If I’m not mistaken, it is a government
expenditure for investment purposes to
improve facilities in the basic physical
infrastructure. This expenditure is focused
on development projects that can boost
Wait, I think I know this. It
consist of Defence and
Services, Social Services
and General Administration.
Am I right ?
Yeahh. Good girl.
Do you know that economic service
comprise agriculture and rural
development, trade and industry,
transport, public utilities and other
service including communications,
feasibility studies and mineral resources?
While general administration
includes the Department of
Public Services (JPA), Inland
Revenue Department (LHDN),
Royal customs and Excise,
Department of Statistics, and
the ministry of Foreign Affairs.
I’ve read that before. I know
about the social service. The
social service comprise
education, health, housing and
social and community services.
Yeap. Now, off to