Question: In some countries, price controls exist on some goods, which set maximum prices at which these goods can be sold. Indeed, the United States experienced

In some countries, price controls exist on some goods, which set maximum prices at which these goods can be sold. Indeed, the United States experienced a period of wage and price controls when the Nixon administration introduced wage and price controls in 1971. Sometimes the existence of price controls leads to the growth of black markets, where goods are exchanged at prices above the legal maximums. Carefully explain how price controls present a problem for measuring GDP and for measuring the price level and inflation.


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