Bhargav Dangar discusses price controls and inflation. Price controls are government mandated minimum or maximum prices for essential goods. Governments implement price controls when prices on items like food and oil rise rapidly. Inflation is healthy under 5% as prices rise with economic growth, but inflation over 10-15% can occur due to issues like hoarding and black marketing. Price controls can be direct through laws or indirect through monetary, fiscal, and trade policies. Indirect controls work through influencing the money supply, public purchasing power, and trade to stabilize prices.

1. Bhargav Dangar
Economics
Roll No. 22

2. Price Control
• Government mandated minimum or
maximum prices that can be charged for
special goods.
• Government sometimes implement
price controls when prices on essential
items, such as food or oil, are rising
rapidly.

3. Price Rise
• Price of goods & services rise up
keeping in with growth rate, which is
called inflation, which is healthy if
economy is below 5%.
• But inflation rises up to 10-15% or
above, sometimes, on account of
adoption of wrongful business eg.
Hoarding, black - marketing.

4. Methods of Price control
- Controls exercised under laws, like - Controls exercised by
the Essential Commodities Act, IDRA policies Monetary policy,
etc. & the P.D.S. Fiscal Policy & Trade
Policy.
Methods of price control
Direct Controls
Indirect
Controls

5. Indirect Control
• Indirect controls are exercised mainly through the monetary policy,
fiscal policy, & commercial policy.
• The term monetary policy refers to the policy of the Central Bank of
the country in respect of the cost & availability of credit.
• The rational of using the monetary policy to control prices is that
there is a very strong direct relationship between money supply &
prices.

6. Continue
• Fiscal policy refers to the policy of the government in respect of
public revenue & public expenditure.
• Fiscal policy can influence the price level by increasing or
reducing the purchasing power of public.
• Commercial policy has also been used to a certain extent to
stabiles the domestic economy.