In Which Way Does a Planning System Function

question 19

Multiple Choice

In which way does a planning system function?

• A) The market is left to decide prices and quantities.
• B) A central authority decides what to produce and allocates resources to production.
• C) Government owns and makes everything.
• D) Businessmen plan their economic strategy and carry out their plans to the best of their ability.

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Definitions:

Goods Manufactured

The total value of all products that have been completed during a specified period.

Overhead Rate

A calculation used to allocate indirect costs to produced goods, based on a specific base, such as labor hours.

Direct Labor Cost

The total cost of employment for employees who directly contribute to the production of goods or services, including wages and benefits.

Machine-Hours

A measure of the total time that machines are operating in a manufacturing process.