Scarcity: our wants and needs are virtually unlimited, but our resources to satisfy those desires are

limited. Thus, we must choose which desires to satisfy. Need to use the resources efficiently and
effectively.

Opportunity Cost: This concept goes hand in hand with scarcity. Commonly known as the basic
relationship between scarcity and choice, opportunity cost is a benefit someone gives up in order to gain
something else. For example, if you have $10 to spend but you must choose between spending it on
food and spending it on a book, you must give up one to attain the other.

Demand: how much of a good or service is desired by consumers. For example, if the price of apples is
low, many people will purchase them, or demand them, because they're very affordable.

Supply: which is how much the market offers. At a lower price, suppliers will produce less because of
low revenue potential. At a higher price, suppliers will produce more.

Incentive: People respond to incentives. Governments offer them because they can motivate individuals
to act a certain way, which can be a good thing. For example, if a government offers subsidies to firms
who reduce their pollution to a specified amount, firms will want to minimize their pollution so they can
take advantage of the subsidy.

Purchasing Power and Inflation: Your purchasing power doesn’t remain the same because of the
inflation.

Monetary policy and fiscal policy refer to the two most widely recognized tools used to influence a
nation's economic activity.

Monetary policy is primarily concerned with the management of interest rates and the total supply of
money in circulation and is generally carried out by central banks, such as the Pakistan State Bank.

Fiscal policy is a collective term for the taxing and spending actions of governments. In the United
States, the national fiscal policy is determined by the executive and legislative branches of the
government.

TAXES:

Direct taxes are one type of taxes an individual pays that are paid straight or directly to the government,
such as income tax, poll tax, land tax, and personal property tax.

Income Tax: Based on one’s income. A certain percentage is take from a worker’s salary
depending on how much he earns.

Transfer Taxes: Tax collected from people who are transferring properties.

Entitlement Tax: BABA

Property Tax

Advantages: Promotes equality, certainty, elasticity (taxes are the earnings of the government and when
they fluctuate the earnings also fluctuate. Saves time and money (government does not need to spend
on the collection of taxes as they are collected right form the source of the income)
Indirect Taxes:

can be transferred on to another entity. Therefore, the burden of paying it can be put on another
person’s shoulders.

Direct taxes can be evaded in the absence of proper collection administration. Indirect taxes cannot be
escaped from because these are charged automatically on goods and services.

Direct taxes can help address inflation while indirect taxes can lead to inflation.

Direct taxes lessen the savings of earners, but indirect taxes encourage the opposite because it makes
products and services more expensive and unaffordable.

Direct taxes are imposed only on people that belong to various income brackets. Indirect taxes, on the
other, can be felt by everyone who buys goods and avails services.

Value-added tax (VAT) VAT (locally termed as 'sales tax') is ordinarily levied at 17% on the value of
goods, unless specifically exempt, after allowing related input credits. Export of goods is subject to sales
tax at 0%

Stamp Duty: In the case of sale or transfer of immovable property, stamp duty is payable

The Federal budget 2017–18 was the federal budget of Pakistan for the fiscal year beginning from 1 July
2017 and ending on 30 June 2018. It was presented by Finance Minister Ishaq Dar on 26 May 2017 at
the National Assembly with a total outlay of ₨. 4.75 tn.

54% of the budget goes to the military.

58 per cent of total revenue is being provided to the provinces in the light of NFC Award

GDP growth rate increased from 3.7 percent in 2012-13 to 5.3 percent in 2016-17 which was the highest
in the past ten years. – During the 11th Plan period (2013-18) the economy recovered from a difficult
phase, marked by low growth caused primarily by a serious security situation and persistent energy
crisis. Sound macroeconomic management and decisive actions to bring peace and order and resolve
the energy crisis helped in improving the macroeconomic environment considerably during the past four
years. ---

flaws already discussed – consumption led growth under PML -N

12th Five Year Plan (2018-2023)