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In order to control rapid increases in prices, the government establishes:
a.market circular flows
b.Tarrifs
c.price controls
d.Natural monopolies

2007-02-21 12:16:54 · 4 answers · asked by yummycrummy07 1 in Social Science Economics

4 answers

a. Is this some new economic term? I never heard of market circular flows in my econ classes.
b. Tariffs only protect domestic producers from foreign competition. They might even contribute to price inflation, so I would definitely not choose tariffs.
c. Price controls are the obvious and knee-jerk answer, even though in the long run, they do not work. All they do is to force businesses out of business for lack of profit.
d. Monopolies are generally anti-competitive, so do not help prices to stabilize.

A stable currency policy is actually the best. Lowering the Fed's interest rate has worked for Alan Greenspan. But this does not seem to be one of your options.
Hope that helps.

2007-02-21 12:30:22 · answer #1 · answered by DinDjinn 7 · 0 0

Price controls

2007-02-21 20:20:43 · answer #2 · answered by cottagstan 5 · 0 0

read and do your own homework

2007-02-21 20:23:03 · answer #3 · answered by 2"CUTE"2B30 4 · 0 0

c.

2007-02-21 20:33:29 · answer #4 · answered by eric c 5 · 0 0

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