Why Did the Centralized Systems, Especially in the Industrial Economy

question 48

Essay

Why did the centralized systems, especially in the industrial economy, prove less effective in the 1970s and 1980s than they had been earlier?

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Definitions:

Sticky-Wage Theory

An economic theory that proposes wages tend to adjust more slowly to changes in the economy, affecting employment and labor market dynamics.

Short-Run Aggregate Supply Curve

Represents the relationship between the total production of goods and services at different price levels in an economy, assuming some inputs are fixed.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy, often used to gauge inflation.

Production

The process of creating goods and services from various inputs such as labor, technology, and raw materials.