Economics (AS & A Level) · May / June 2021 · Paper 33 · Question 30
9708Methods and effects of government intervention in markets
A government is increasing the role of market forces in its economy. However, it imposed temporary maximum price controls. Why might a government, committed to reducing central planning, introduce price controls?
- Ato increase allocative efficiency
- Bto increase the incentive for producers to raise supply
- Cto reduce consumer demand
- Dto reduce expectations of inflation
As printed in the paper
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Correct answer: D. to reduce expectations of inflation
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