The return of price controls
Price controls – limiting the price of goods through government intervention in a market – have fallen out of fashion to a great extent as an economic policy tool in the past couple of decades, but they may be making a comeback in Argentina, Russia and China according to the article below from Slate magazine.
Cry for me Argentina (and Russia and China) MSN Slate (30/10/07)
Questions
| 1. | Using supply and demand diagrams as appropriate, illustrate the ways in which price controls have been used to influence prices in Argentina and Russia and China. |
| 2. | Examine the reasons why the Argentinean government has chosen to implement price controls for energy. |
| 3. | Discuss the likely effectiveness of price controls in combating inflation in Russia, China and Argentina. |