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shenamae solamo
on Oct 09, 2024

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"Because the outputs of many industries are the inputs to other industries,the failure of any single industry to fulfill the output quantities specified in the central plan caused a chain reaction of adverse repercussions on production." This quotation best identifies the:

A) incentive problem under central planning.
B) self-sufficiency dilemma under communism.
C) resource overcommitment problem under communism.
D) coordination problem under central planning.

Coordination Problem

Challenges that arise when parties involved in economic activity must align their plans and actions to effectively achieve their objectives.

Central Planning

An economic system where the government makes all decisions about the production and distribution of goods and services, often found in socialist economies.

Chain Reaction

A sequence of reactions where a reactive product or by-product causes additional reactions to take place, often leading to a self-sustaining series.

  • Understand the basic characteristics and problems of centrally planned economies.
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Susanne ArnettOct 12, 2024
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