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1、ChapteroneGovernmentandPublicFinanceinthesocialistmarketeconomyPurposeandRequestsThischapterregardsoperationofmarketeconomyasthestartingpointandexplainstherelationshipamongthemarket,thegovernmentandpublicfinance,especiallycarriesonsystematicanalysistogeneralfinancialelementsandoperati
2、oncharacteristicsofthepublicfinancialmode.Afterstudyingthischapter,studentsshouldbeabletograspthebasicconceptionofthepublicfinanceandtheinnerlinkamongpublicfinance,marketfailuresandthefunctionofthegovernmentandhaveanideaaboutthesituationofthehotdiscussiononpublicfinanceinourcountry.Se
3、ction1ThegovernmentandthemarketThispartconsistsoftheefficiencyofresourceallocationbymarket,marketfailure,publicgoodsandmonopolyinmarket.ⅠTheefficiencyofresourceallocationbymarketUnderthecompletecompetitivemarket,theproducersandconsumersbasedontheirowninterestsandrationalbehaviors,conn
4、ectandinteractwitheachother,promotingtheallocationofsocialresourcestoreachtheoptimumstate,namely:ParetoEfficiency.ⅡMarketfailureHowever,theconditionsofthecompletecompetitivemarketareverydifficulttoreachinpractice.Themarketmechanismhasitsone'sowndefectsthatcan'tbeovercome.Theyare:Exter
5、nalities--Acertainindividualunitdoesnotbearthecorrespondingcostexpensesorsharetheadvantagesfromthebehaviors,whichexertfavorableorunfavorableinfluenceonotherindividualunitsineconomicactivities.Publicgoods—goodsorservicehavingthenatureofpublicconsumptionanddoingbenefitstothepublics.Mono
6、polyinmarket--Whenthescaleofonetradereachestherelativelyhighscale,thescaleincomewillincreaseprogressivelyandthecostwilldecreaseprogressively,whichcausesthemonopoly.Incompletemarket--Inrealisticmarketsystem,somelinkshaveobviousincompletecharacteristics.Forexample:Insurancemarket,capita
7、lmarket,andcomplementarymarket.Incompleteinformation--Inreality,thoughtheproducersandconsumerscangettheinformationtheyneededtoacertainextent,theyareunabletogetthetotallyenoughinformation.And,theacquisitionoflotsofinformationwillcostthemalot.Forlackoftheinformation,theefficiencyofresou
8、rcesa
