Government Interventions : An Economic Intervention

1590 Words Dec 3rd, 2015 7 Pages
Government interventions is an economic intervention by the government or international institution in a market economy to help impact the economy past basic regulation of fraud and enforcement of contracts. Government regulations are split into two categories, social regulation and economic regulation. Economic regulations obtain to mainly control prices. This was intended to protect consumers and certain companies from more powerful companies. Social regulations obtain to promote objectives that are not economic, such as safe workplaces and a cleaner environment. My Government Interventions are the First Income tax, The Interstate Commerce Act, and The Sherman Antitrust Act. I will evaluate these interventions by describing what it was, what the purpose of the act was, the primary and secondary costs and benefits of the intervention, and if the intervention was economically efficient. A law enacted by the government to help control prices is called a price control. Price controls have two parts, price ceilings and price floors. This law assists producers in setting the price ceiling and price floor in the market place. Price floors retain the price from falling below a certain level. A price floor in the market for goods and services is the lowest legal price that can be paid. Price ceilings keep the price from exceeding a certain level. This helps support the attempt to keep prices lower for consumers who demand a product. Although the concept of price ceilings and…
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