A Problem Inherent in Centrally Planned Economies Is

question 137

Multiple Choice

A problem inherent in centrally planned economies is:

• A)households and firms make poor decisions in choosing how resources are allocated.
• B)there is too little production of low-cost, high-quality goods and services.
• C)production managers are more concerned with satisfying consumer wants than with satisfying government's orders.
• D)exports tend to exceed imports.

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Definitions:

Inefficient And Inequitable

Situations or systems that do not maximize resources or distribute outcomes fairly among participants.

Collective Bargaining

The process of negotiating the terms of employment between an employer and a group of workers.

Unions

Organizations formed by workers to protect their rights and interests through collective bargaining with employers.

Efficiency Wages

Wages set above the market-clearing level by employers to increase worker productivity, discourage turnover, and reduce shirking.