FINANCE FUNCTIONS

Jun 21st, 2015
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• A heterodox macroeconomic theory developed by Abba Lerner during World War II that seeks to eliminate economic insecurity (i.e., the business cycle) through government intervention in the economy. • Finance function is the most important function of a business.

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FINANCE FUNCTIONS A heterodox macroeconomic theory developed by Abba Lerner during World War II that seeks to eliminate economic insecurity (i.e., the business cycle) through government intervention in the economy. Finance function is the most important function of a business. Finance is, closely, connected with production, marketing and other activities. In the absence of finance, all these activities come to a halt. In fact, only with finance, a business activity can be commenced, continued and expanded.Finance exists everywhere, be it production, marketing, human resource development or undertaking research activity. Understanding the universality and importance of finance, finance manager is associated, in modern business, in all activities as no activity can exist without funds.Functional finance emphasizes the end result of interventionist policies on the economy and is based on three major beliefs:1. It is the role of government to stave off inflation and unemployment by controlling consumer spending through the raising and lowering of taxes.2. The purpose of government borrowing and lending is to control interest rates, investment levels and inflation.3. The government should print, hoard or destroy money as it sees fit to achieve these goals.Functional finance also says that the sole purpose of taxation is to control consumer spending because the government can pay its expenses and debts by printing money.Finance functions include:Investment Decision

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