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Bhargav Dangar
Economics
Roll No. 22
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.
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.
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
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.
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.
Methods of Price Control

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Methods of Price Control

  • 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.