Recall in our study of elasticity that the prices of some commodities vary a great deal because of inelasticity of supply and demand. In such cases, governments sometimes form marketing boards in an effort to stabilize prices and thus insulate producers against the devastating effects of severe price decreases. This is another example of how government action in the economy might influence the distribution of income as well as compensate for the lack of bargaining power of the producer.
Maintaining Employment As you will learn when studying macroeconomics, there is nothing inherent in a price and market system to ensure that a high level of employment will automatically occur and be maintained. It is a primary function of government to attempt, through fiscal and monetary policy and other means, to bring about high level of employment and stable prices. Further attention to these problems is deferred until you study macroeconomics. https://www.daringabroad.com/best-portable-camping-hammock-stand |