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3356648
Government Intervention on Price System
Descrição
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Sem etiquetas
government intervention
price systems
market failures
Mapa Mental por
Grace Frances
, atualizado more than 1 year ago
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Criado por
Grace Frances
mais de 8 anos atrás
35
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Resumo de Recurso
Government Intervention on Price System
How the Government Intervenes:
Regulations
Minimum Price Control (Price Flooring)
Purposes: (e.g.)
To discourage the consumption & Production of Demerit Goods
So Governments can support buy purchasing the products of farmers
Maximum Price Control (Price Ceiling)
Purposes: (e.g.)
To prevent monopolistic exploition of consumers
So necessities can be affordable for those with lower incomes
Financial Intervention
Taxes
Direct Taxes
Examples:
Corporate Tax
Income Tax
Indirect Taxes
Specific Tax
e.g.
Excise duties on Alcohol or Tabacco
Ad Valorem Tax
e.g.
Value Added Tax
Purposes:
Discourage Demerit Goods
Other Taxes
Proportional Tax
Progressive Tax
Regressive Tax
Subsidies
Purposes:
To keep market prices of necessities low
To encourage the consumption of merit goods
Government Provision
Financed by the Tax revenue
Transfer Payments
Examples:
Old Age Pensions
Unemployment Benefits
Child Benefits
Direct Provision of Goods & Services
Provision for those with low incomes
Examples:
Merit Goods
Health Care
Education
Nationalism & Privatisation
Nationalism
Private -> Public Sector
Advantages:
Employees would feel more job security
Profits are reinvested in the business
Privatisation
Public -> Private Sector
Advantages:
More Efficiency
More competition
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