A characteristic of centrally planned economies is that
A) the price is relatively unimportant in allocating resources.
B) proﬁts are the main measure of success of a ﬁrm.
C) entrepreneurship is quite prevalent and highly rewarded.
D) there are many incentives for innovation and hard work.

Question

Quizplus · Accepted Answer

Centrally planned economies rely on government planners to allocate resources, rather than market forces such as price. Therefore, the price is relatively unimportant in this type of economy. Proﬁts may not be the main measure of success, entrepreneurship may not be prevalent, and there may not be many incentives for innovation and hard work.

A Characteristic of Centrally Planned Economies Is That