An economic system is expressed by the goods and services produced, distributed or consumed by different mediaries in a region. How well an economy is running in a region can determine what status the region is in. There are many conditions which affect the state an economy is in. A centralized government often tries to control many aspects in the region that it controls. There are several entities in a region that a government should control. Without listing specific areas a government should control, a government should be viewed as; a system that provides order and security to the population in a region. There are some who believe the status of the economy effects their personal security and the order of society. These people demand the
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Both price controls and wage controls intend to help both consumers and producers. Wage controls offer consumers more money to buy goods and services, while price controls can help both consumer and producer. When viewing the effects of price ceilings and price floors it seems as if it helps, which it does. The problem with price control is that it creates shortages and surpluses in an industry. If a price is set above the equilibrium point set by the market there is a surplus, like the “U.S. and European farm programs” (Morton). If a price is set below the equilibrium point there is a shortage, such as when the United States “federal government restricted gasoline price increases in the 1970’s” (Morton). The reason the surpluses and shortages occur is because consumers do not want to pay for a good or service if the price is too high, and if the price is too low producers do not want to sell. When the government effects prices it harms the economy, just like when they control wage earnings. Most economic studies in which focus on minimum wage proves “raising the minimum wage destroys jobs” (Bandow). When the first minimum wage was established in 1938 over 40,000 workers lost their jobs, which hurt the economy more than it helped it. There are several problems that effect employees and employers if the minimum wage were to increase, such as; “raising consumer prices”, “laying off employees”, and “pushing employees annual income into a higher tax bracket” (Bandow). When employees and employers are negatively affected by wage increases it can be inferred that it should not be done. The government trying to set prices and wages is a direct way they are trying to control the economy. Setting minimum prices and wages, and maximum prices is bad for the economy. This is just another example of how the government controlling the economy will cause negative
Both price controls and wage controls intend to help both consumers and producers. Wage controls offer consumers more money to buy goods and services, while price controls can help both consumer and producer. When viewing the effects of price ceilings and price floors it seems as if it helps, which it does. The problem with price control is that it creates shortages and surpluses in an industry. If a price is set above the equilibrium point set by the market there is a surplus, like the “U.S. and European farm programs” (Morton). If a price is set below the equilibrium point there is a shortage, such as when the United States “federal government restricted gasoline price increases in the 1970’s” (Morton). The reason the surpluses and shortages occur is because consumers do not want to pay for a good or service if the price is too high, and if the price is too low producers do not want to sell. When the government effects prices it harms the economy, just like when they control wage earnings. Most economic studies in which focus on minimum wage proves “raising the minimum wage destroys jobs” (Bandow). When the first minimum wage was established in 1938 over 40,000 workers lost their jobs, which hurt the economy more than it helped it. There are several problems that effect employees and employers if the minimum wage were to increase, such as; “raising consumer prices”, “laying off employees”, and “pushing employees annual income into a higher tax bracket” (Bandow). When employees and employers are negatively affected by wage increases it can be inferred that it should not be done. The government trying to set prices and wages is a direct way they are trying to control the economy. Setting minimum prices and wages, and maximum prices is bad for the economy. This is just another example of how the government controlling the economy will cause negative