The Pinochet government eliminated the bargaining power of workers by suspending collective bargaining and prohibiting union activity. Wage readjustments were decreed by the government.

4.1

With reference to the above statement, discuss who benefits and who loses in the case of minimum price (price floor) and why such schemes can be difficult to maintain in the long run (Use graphs and examples to motivate your answers) (10)

4.2

Compare and contrast the economic policies under Allende and under Pinochet in Chile and critically evaluate whether government intervention in Chile has either helped or hindered economic growth. (7)

4.3

Evaluate ANY TWO (2) economic policies that the Chilean government used to reduce the high rate of inflation in their country.