One of the Most Significant Problems Faced by Communist Nations

question 41

Multiple Choice

One of the most significant problems faced by communist nations is

• A) inequality in the distribution of wealth and income.
• B) severe inflationary pressures due to rapid economic growth.
• C) too little government regulation of economic activity.
• D) persistent shortages of basic goods such as food and clothing.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one good for another.

Wage Increase

An upward adjustment in the salary or earnings paid to an employee.

Utility Maximizing

Acting in a way to achieve the highest level of satisfaction possible with available resources.

Demand For Labor

The total amount of labor that employers want to hire at various wage rates, contingent on factors such as technology, the price of the goods being produced, and the availability of other inputs.