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This paper examines how, in the United States, the government imposes several forms of taxes and price controls and how all individuals are required to pay direct and indirect taxes. It looks at how the approach of taxation has been a common debate for economists and policy makers and how most economists oppose price ceilings and price floors. It also discusses how the price controls have some positive and negative aspects that affect the economy and how the constraints of taxation on goods and price controls highly affect the U.S. economy.
From the Paper:"The economy is affected by government regulations of price controls. Price controls are most commonly used as a response to inflation. Price controls may help the poor break out of poverty by implying rent-control laws and minimum wage laws. The government imposes price ceiling and price floor limits for suppliers of goods. Most price ceilings are intended to protect consumers. A price ceiling is a legal maximum of how high a price can be charged on a product. The price ceiling may be set below or above equilibrium price. In a successful market the government may imposes a legal minimum on the price. For example, if the market prices are above the price ceiling there will be a binding constraint. With lower prices the quantity demanded will increase and may result in a shortage of product. The price floor set is the legal minimum on the price that a good can be sold. A price floor is more effective when greater than the equilibrium price."
Sample of Sources Used:
- Economic indicators. (2000, March). Congressional Digest, Retrieved April 23, 2008, from Academic Search Premier database. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=2889145&site=ehost-live
- Mankiw, N. G. (2004). Principles of economics (3rd ed.). Chicago, IL: Thomson South- Western.
- Schenk, R. ( 1997-2007). Cyber economics. Price controls. Retrieved on April 24, 2008, from http://ingrimayne.com/econ/TOC.html
Cite this Term Paper:
Taxation (2008, October 29) Retrieved June 30, 2022, from https://www.academon.com/term-paper/taxation-108815/
"Taxation" 29 October 2008. Web. 30 June. 2022. <https://www.academon.com/term-paper/taxation-108815/>