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Dear friends,
I am in Pakistan to give my exams and I've found this forum to be quite useful. I wanted to share an answer with you guys and please let me know if the points I've written are acceptable and do they full fill the requirements of CIE.
the question is: discuss the importance of price in effective operation of mixed economy.
The following is the answer:
definition of Market system
defined Price mechanism
the points about : tariffs (to raise price and improve BoP),
subsidies to domestic market (to stimulate demand),
export subsidies (to increase supply of locally produced goods in international market),
price ceiling (to safeguard comsumers from exploitation)
and price flooring (help producers, especially farmers, in making a substantial income at least).
However: over production of de-merit goods
too low production of merit goods
potentially lack of efficient production of public goods by private sector
Looking forward to read the critiques.
I am in Pakistan to give my exams and I've found this forum to be quite useful. I wanted to share an answer with you guys and please let me know if the points I've written are acceptable and do they full fill the requirements of CIE.
the question is: discuss the importance of price in effective operation of mixed economy.
The following is the answer:
definition of Market system
defined Price mechanism
the points about : tariffs (to raise price and improve BoP),
subsidies to domestic market (to stimulate demand),
export subsidies (to increase supply of locally produced goods in international market),
price ceiling (to safeguard comsumers from exploitation)
and price flooring (help producers, especially farmers, in making a substantial income at least).
However: over production of de-merit goods
too low production of merit goods
potentially lack of efficient production of public goods by private sector
Looking forward to read the critiques.