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The principle of maximum social advantage is concerned with the level at which the government should operate, which in turn is determined by its activities.
The purpose is to design the policy and operations of the government so as to achieve
maximum welfare for the economy.
Simplifying assumptions
i). All taxes drain away the economy‘s resources.
ii). All public expenditures restore these resources of the economy
iii). Government revenue consists of only taxes and the government has no surplus or deficit
budgets.
iv). Public expenditure is subject to diminishing marginal social benefit and the taxes are
subject to increasing marginal social disability (cost).
NatalieR answered the question on June 21, 2022 at 05:31