Group items tagged

This article relates to government intervention in the form of increasing the minimum wage in some states. However, this increase was met with an increase in unemployment; which we also looked at. This unemployment is caused by a high price where supply is greater than demand, and the need for workers therefore decreases (increasing unemployment).

"We need to have a much more honest conversation about the tradeoff between inflation and real growth." There is an ongoing conflict of how to manage inflation via increasing aggregate demand which is the classic trade off. The article indicates "liberals arguing for government intervention and conservatives often pushing for tax breaks and incentives to get the private sector moving again." This is not only a national economic conflict, but a political conflict as well.

This article discusses the issue in the state of California of poor road quality. It is causing citizens to pay extra money each year for car repairs...the money for car repairs in California exceeds every other state. So this article shows an example of poor quality public goods. Like I mentioned in my comment in the class discussion, government intervention eliminates competition, which can lead to a poor quality product...well this is an example of poor quality public good. No toll highway or road would ever be poor quality and have holes and bumps.

A government sponsored agency currently controls the prices for dairy products in Canada. This was implemented because the government wanted to regulate the prices paid to dairy farmers and the amount of milk they could produce, in order to protect the farmers. However, problems have begun to arise because of these price controls, mostly due to the fact that the market price is much higher than it should be (which hurts consumers) and it is costing billions of dollars each year.