Although wage and price controls can potentially be effective in reducing inflation,economists generally oppose them because:
A) the more effective they are in holding down prices, the more they cause shortages.
B) all economists are always opposed to any government intervention.
C) they shift the long-run Phillips curve to the right.
D) they shift the short-run Phillips curve down.

Question

Quizplus · Accepted Answer

Economist generally oppose wage and price controls because although they have the potential to reduce inflation, they often lead to shortages in the economy. The more effective the controls are, the more likely they are to cause shortages. This is because, with controls in place, suppliers and producers may be unwilling or unable to meet the demand of consumers at the controlled prices, ultimately leading to shortages.

Although Wage and Price Controls Can Potentially Be Effective in Reducing