Large-scale central planning has been abandoned throughout the world (except for North Korea and Cuba) because of ______ and ___ problems.
A) information; transactions cost
B) incentives; asymmetry
C) information; incentive
D) communication; complexity

Question

Quizplus · Accepted Answer

Large-scale central planning was abandoned due to information and incentive problems. Information problems arise when central planners lack accurate knowledge of individuals' needs, preferences, and productivity. Incentive problems arise because central planners lack the profit motive that drives individuals to work hard and innovate. This often results in inefficiencies, waste, and shortages.

Large-Scale Central Planning Has Been Abandoned Throughout the World (Except