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Could You Explain Direct Control Vs Indirect Control?
The direct control work outside the market system. As if government wants to reduce the demand it will impose the system of rationing, or impose the restrictions on the buyer to buy the goods. On the other hand, in case of indirect controls in order to reduce the demand government can depend upon fiscal measures etc. as it can impose tax on personal income so that the purchasing power of the people could decrease and they could buy the goods in the amount lesser than earlier.
Again, it can impose indirect taxes on goods. As a result their prices will rise leading to reduce their demand. It means that the indirect control the market system is entertained there the market is influenced in such a way that the demand and supply are equalized.
On the other hand the direct control the market is not included, and they are concerned with the system of restrictions.
So as the planning takes over the market, the controls become necessitated. Under direct controls the demand aspect, the supply or both the demand and supply aspects are influenced through restrictions and sanctions. Here the quality between the demand and supply is brought through some determined limit.
Again, it can impose indirect taxes on goods. As a result their prices will rise leading to reduce their demand. It means that the indirect control the market system is entertained there the market is influenced in such a way that the demand and supply are equalized.
On the other hand the direct control the market is not included, and they are concerned with the system of restrictions.
So as the planning takes over the market, the controls become necessitated. Under direct controls the demand aspect, the supply or both the demand and supply aspects are influenced through restrictions and sanctions. Here the quality between the demand and supply is brought through some determined limit.