Wage and price controls
A) are an effective means to control strong cost-push inflation over the long haul.
B) are an easy and inexpensive means to contain inflation.
C) typically are enthusiastically supported by labor unions.
D) ultimately break down if monetary and fiscal policies are overly expansive.
E) are least desirable during a period of all-out war or other national emergency.

Question

Quizplus · Accepted Answer

Wage and price controls may appear effective in the short term, but they ultimately break down if monetary and fiscal policies are overly expansive. This is because they do not address the root cause of inflation and instead create distortions in the market. As a result, they can lead to shortages, reduced quality and quantity of goods and services, and other unintended consequences. As such, they are not a sustainable solution to inflation control.

Wage and Price Controls