In the 1970s,the government attempted to regulate prices to control inflation; this attempt was unsuccessful.The most likely reason was that
A) it increased menu costs.
B) it created future price certainty.
C) it removed relative price signals for those items that had actual increases in demand that were not due to inflation.
D) it created money illusion.
E) the Watergate break-in destroyed Americans' faith in the government.

Question

Quizplus · Accepted Answer

By attempting to regulate prices, the government did not allow for relative price signals to dictate pricing for items that had actual increases in demand. This led to market inefficiencies and potentially higher prices for goods in high demand. Therefore, the attempt at price regulation was unsuccessful in controlling inflation.

In the 1970s,the Government Attempted to Regulate Prices to Control