ECON Video #8

ECON Video #8 - Michael Blasius 11/08/07 Video #8 Economic...

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Michael Blasius 11/08/07 Video #8 Economic Efficiency: What Price, Controls? In a market, the invisible hand decides how much goods go for and how much is produced. Because of the Vietnam War and programs of the Great Society, inflation caused prices to rise. Because of this, government officials gathered to decide upon a temporary price and wage freeze. Later, he once again froze prices on meat and other products. While prices for farmer’s cattle feed rose, the beef prices themselves were still frozen. Because of this, farmer’s decided to withhold their beef from the market. When the beef did finally hit the market, there was so much beef that prices went down. The lesson in this is that it is always better for the market to set the prices of goods instead of the government regulating the prices. John Kennteth Galbreath was the man elected to institute price controls in the United States. In order to increase business production, the government set high prices for war materials which caused profits for businesses to rise sharply. This led to increased employment effectively
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This note was uploaded on 04/20/2008 for the course ECO 215 taught by Professor Mirimiani during the Spring '08 term at Bryant.

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ECON Video #8 - Michael Blasius 11/08/07 Video #8 Economic...

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