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Explain five principles of Government spending.
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Jun 25, 2021
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Business Studies Form 2
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anony mous
Explain five principles of Government spending.
government and business
government involvement in business activities
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Jun 25, 2021
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anony mous
Sanction.
The expenditure must be authorized/approved by parliament/relevant bodies.
Economy.
Should be incurred in the most affordable way/to avoid any possible wastage/misuse
Accountability/Good/proper financial management
Public funds should be well managed/proper records maintained(for auditing)
Flexibility
The expenditure policy should accommodate the changing/prevailing economic situations (e.g. drought/floods/pandemics etc).
Maximum/optimum Social benefit
Any expenditure must accord maximum benefit to the majority of the people.
Productivity.
The expenditure should be incurred projects that can yield a (return on Investment).
Equity.
Should be incurred in a way that ensures fair income distribution.
Surplus
Savings should be spent on emergencies/fill revenue gaps between collections & projection/ expenditure should be less than the revenue collected
Elasticity
Expenditure should be capable of being expanded/contracted in line with the size of the economy
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