Governments can employ a number of wage and price control measures to control wages and prices in the economy. Just to name a few, there are price ceilings, minimum and maximum wage laws, and tariffs. Government-imposed price ceilings are the highest prices that can be charged for goods and services. These are frequently used to stop inflated prices during emergency situations, like pandemics or natural disasters, when demand for particular goods may increase. For instance, to stop shopkeepers from charging costly rates during the COVID-19 pandemic, many governments imposed price caps on necessities like hand sanitizer and face masks. This prevented businesses from taking advantage of the public need for simple goods and not up-charging these products for profit. A minimal hourly salary is mandated by minimum wage legislation, that businesses must adhere to. The purpose of minimum wage regulations is to guarantee that employees receive fair pay that covers their essential living expenditures. Maximum wage laws set a limit on the amount of income a single worker can get. This may happen in some sales positions and other companies may put this in place to save money. However, this policy is rarely used and is almost never seen. Tariffs are taxes on imported goods. They are designed to make domestic goods more viable. Tariffs are used to protect domestic industries and businesses from other foreign companies that may pose major competition with domestic companies. However, there is a negative side to tariffs. They can increase the prices of goods coming into the country. Tariffs have also been known to reduce trade and limit imported goods. This may cause customers to have less variety in products and be forced to buy something made in the country. Discuss?

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The use of wage and price control measures by governments can have both positive and negative effect... View the full answer