The Basic Argument Against Wage and Price Controls Is That

question 24

Multiple Choice

The basic argument against wage and price controls is that

• A) they can be used only during periods of all-out war.
• B) as a solution to inflation, they are popular with economists, not with politicians or the general public.
• C) they require labor to take wage reductions before firms can reduce their prices.
• D) they are not helpful as a short-run remedy, although they do work effectively over the long run.
• E) they necessitate implementing other allocation schemes that often impair economic efficiency.

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Definitions:

Uninformative

Providing no useful or relevant information.

Implausible

Not seeming reasonable or probable; failing to convince.

Implausible

Something that appears unlikely to be true or not believable based on current evidence.

Informative

A characteristic of communication or data that provides new knowledge or insights.