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Status: Required course

Period: Third year, First semester

ECTS credits: 6

Class hours: 75 class hours (45 lectures and 30 seminars)

Language: English


Prerequisites: completed courses in Micro I- and Macroeconomics I, Money, banking and financial markets.


Course content

The course in Public finance introduces the basics of the theory and the most important practical aspects in this field of economic knowledge. The course requires that the students have already completed the courses in Micro- and Macro I and Money, banking and financial markets and expands the knowledge particularly in the area dealing with the functioning of the markets. It is well known that some of the economic decisions regarding manufacturing, consumption and others are taken by private individuals while there are areas where it is a must to apply public choice. Since the state can be considered the largest economic agent, the study of the economy of the state (public) sector and of the public finance helps make appropriate evaluation of the interactions with the private sector. The latter, from micro plan perspective, means better understanding of the mechanisms of public finance, including the tax system, support schemes (subsidies) and others and the resulting optimal behavior of the company/individual according to the available information.

Since the governance of public finances has a decisive role in the development of any economy, the type of decisions that are made may lead to positive or to negative effects on the economic development of the country. Therefore, economists who are planning to work in the sphere of public governance or in private companies should be familiar with the respective mechanisms and tools in order to achieve optimal results for the development of the national economy and the economy of the regions, municipalities and the businesses they work for.


Intended learning outcomes

- The main characteristics, the production and offering of public goods, as well as the sources of their financing

- Mechanisms of appearance of the so-called externalities, as well as tools and techniques for their correction

- Characteristics of public expenditure and the purposes of performing

- The main features of taxation, advantages and disadvantages of the main types of taxation, types of taxes

- Basic principles and instruments of fiscal policy

- Apply the basic techniques of cost-benefit analysis

- Perform basic tax calculations

- Be able to determine the direction and the size of the influence of fiscal policies at given parameters of the microeconomic environment

- Analyze how different generations are affected when public debt is covered by the state.