-
Regulation
The imposing of rules, controls and constraints, which restrict freedom of economic action in the market place.
-
Tax
A compulsory levy imposed by the government to pay for its activities. Taxes can also be used to achieve other objectives, such as reduced consumption of demerit goods.
-
Price Ceiling
A price above which it is illegal to trade. Price ceilings, or maximum legal prices, can distort markets by creating excess demand.
-
Price Floor
A price below which it is illegal to trade. Price floors, or minimum legal prices, can distort markets by creating excess supply.
-
Government failure
Occurs when government intervention reduces economic welfare, leading to an allocation of resources that is worse than the free-market outcome.
-
State Provision
Where the government provides a good/service or publicly funds a service/good, financed through direct taxation and offered free at point of use. Also referred to as direct or public provision.
-
Tax Relief
Similar to subsidies, use to increase consumption of goods with positive externalities.
|
|
