Government Intervention In Economic Welfare Essay

531 words - 2 pages

In pure market economy, price has been set by price mechanism where it coordinates the interaction between demand and supply resulting in a price changes. According to an economist Adam Smith (1776), in his book “The Wealth of Nations”, price mechanism is likened to be an “invisible hand” which will coordinates the decision made by consumers and suppliers while the economic system are working automatically. However, the theory of “invisible hand” is not absolute. The market economies requires institution such as government to implement policies and making decisions to maintain market and avoid market failure like monopoly and negative externalities. Therefore, government interventions are clearly crucial in the economy to maintain the balance of price and maximizing social and economic welfare to improve market outcomes. For example here, government intervention such as decision to guarantee continuous supplies of horticultural products such as fruit and vegetables will not only complement the high demand and needs for nutrition by society, but it will also avoid price to increase due to shortage in their supply (The Jakarta Post, 2010).
Nowadays in Indonesia, Fruits and vegetables has become rare items due to slow distribution and poor trasportation . Based on the Horticulture Director General Achmad Dimyati (2010) statement, Indonesia have a low level consumption of fruits and vegetables. Food and Agriculture Organization (2010) stated that consumption of fruit and vegetables are recommended to be average of 65 kilograms and 73 kilograms per capita per year. Where Indonesia consumptions are far bellow the recommended number. While due to shortage in their supply, in June 2010 prices of rice and chili has increased by 2.67% and 45.7% (BPS,...

Find Another Essay On Government Intervention in Economic Welfare

Role of Government Intervention in Environmental Issues

1649 words - 7 pages Paper #1: Role of Government Intervention in Environmental IssuesIn environmental cases, a policy framework is sometimes moreeffective when there is less government intervention. As the level ofgovernment intervention diminishes, this allows more flexibility forcorporations to achieve efficiency. Furthermore the traditional command andcontrol approach has proven to be costly, bureaucratic and often inefficient.It is important to address the fact

Government Intervention in Gas Prices: Good or Bad? (REPORT)

1712 words - 7 pages has been evident in several different countries for years. David Webb, in his critique of Hong Kong's implementation of government controls that, "The logical extreme of intervention is when the government takes on a controlling or total interest in equities, that is, nationalisation. Experiments in communism since World War II, and to a lesser degree the nationalisation of industries in Western Europe, have all shown that such an economic system

Poverty in America: Government Welfare Programs are the Solution

1370 words - 5 pages form of EITC program in addition to the federal one. The US Government reformed the welfare system by keeping the same elements, but changing the rules and regulations of the system in 1996. Income support is now limited to no more than 2 years without working and a 5 year lifetime and it would be state regulated. Same for medical care, the shift to Medicaid allowed states to control the support and receipts of healthcare assistance. Food and

"The Causes and Effects of U.S. Economic Intervention in Latin America"

1876 words - 8 pages in Latin American affairs, merely looking out for its best interests from the outside, to a steady, escalating period of U.S. investment and political intervention. A mounting desire for economic prosperity and profit by the United States government and American-owned businesses led to the shift in involvement and caused the political and economic interventions that characterized the first century of Latin American-U.S. relations, interventions

SME Development In Pakistan. Do Economic Growth And Government Support Matter?

2801 words - 11 pages economies. It is very important sector in both developed and developing countries. In Pakistan, SMEDA defines Small & Medium Enterprises, as approved in SME Policy 2007, as an enterprise that has up to 250 employees, or a paid up capital of 25 Million PK Rupees, or an annual sale of up to 250 Million PK Rupees. The Federal Government, in line with the economic development of Pakistan may, from time to time modify the eligibility criteria as it

Do we need government intervention in the form of Competition Policy ? if so, Why? Applied and discuss based on case study or research

1715 words - 7 pages and better products.In the real economy, is it always necessary for government intervention in the form of Competition Policy?Let's consider The United States Airline Deregulation 1978.This deregulation is seen to be successful, it brought benefit to customers. However, it also raised some problems such as congestion, limited re-emergence of monopoly power and with it, and the exploitation of a minority of customers. So when do we need

American civil liberties are defined as civil rights designed with the purpose of limiting government intervention in citizen’s affairs (Civil Lib

1113 words - 5 pages American civil liberties are defined as civil rights designed with the purpose of limiting government intervention in citizen’s affairs (Civil Liberties 1). After the terrorist attacks on the World Trade Center on September 11, 2001, the United States government enacted new policies that did not universally coincide with the civil liberties Americans are guaranteed. Several of the new procedures enacted were unnecessary and caused average

To what extent was the Weimar government successful in addressing its social and economic problems? - IB History HL - Essay

1857 words - 8 pages ’ efforts were marked with mixed results. Firstly, the flu epidemic ended on its own in 1920, causing speculation about whether the government’s efforts to curb it were ever successful. Secondly, the government’s efforts never truly brought down hunger and failed to eliminate outbreaks of disease, though both these issues became less pronounced. With economic crises such as hyperinflation looming and the welfare system’s enormity, the government

The need for Government Intervention in Education Reform

2611 words - 10 pages nation down the road. One of the fundamental principles of our nation should be the paramount concern of this Government body. EQUALITY! In this case equality is achieved through standards. STANDARDS IN EDUCATION         General standards in education have existed formally for over a century but as time went on, local school systems have expanded their curriculum to meet the needs of the local community. National standards must be

Canada and Their Government´s Intervention in the Entertainment Industry

1243 words - 5 pages Many people argue whether not Canada has any culture at all, and why American culture seems to have such a big influence on Canadian music, art and television. Over the years the Canadian government has tried to protect and develop talent in Canada. Once British traditions started to fade away, the influence on Canada from America became stronger. If Canada was to become a strong independent country they needed their own identity. The government

This describes the changes that took place in the 1930's regarding the role of the federal government to helping people in economic hardship

1421 words - 6 pages Europe, but he felt betrayed for big business cast FDR as a villain.The greatest positive accomplishment of the New Deal was to ease the economic hardship, and keep the confidence in American institutions.However, the New Deal failed. When unemployment dropped to 7.5 million in early 1937 and other economic indicators seemed good FDR began to dismantle the government programs.The result was another economic collapse and a depression within a

Similar Essays

Government Economic Intervention Essay

2146 words - 9 pages Government Economic Intervention Introduction The United States began its existence as a country newly free of the British Colonial ways and quickly adopted capitalism and its free market, Laissez Faire, ideology. As the economy grew, so did the government and their desire to influence or control the economy, as a means of maintaining equilibrium and fairness in the market place. More than two centuries later, the people of the United States

The Welfare State And Government Responses To Economic Openness

1692 words - 7 pages The Welfare State and Government Responses to Economic Openness I. Introduction Economic openness is the phenomenon in which individual economies from all over the world become increasingly connected and interdependent through greater liberalization of trade and the vast movement of goods, services, and capital across borders. With the rise of globalization, positive effects have resulted from economic openness. The widespread benefits of

Government Intervention In Business Essay

1858 words - 8 pages their deals. 4 Conclusion We have taken a gander at how government intercession can influence the economy and the business group. We can perceive how Chinese business group profits from the legislature intervention; however, we likewise see the gradually emerging symptom. In the UK, the shortfall diminishment arrange maybe may not be uplifting news to the nearby business group since the monetary tightening is liable to lower total interest

Government Intervention In Agriculture Industry In Indonesia

531 words - 2 pages Jakarta Post, 2010). This problem will be solved depending on how the government will re-act to the situation and what policy will they come out with, to achieve equal distribution of income. In conclusion, government interventions are remarkably needed in market in order to achieve market and price stability and to maximizing social and economic welfare. In this case, by creating bill for horticultural products, it is hope that it can increase