Risk management in command economies
A) is easy because there is no risk.
B) is easy because the government controls most activity and can eliminate risk.
C) tends to be done poorly because government officials do not understand risk.
D) tends to be done poorly because decision makers are insulated from the risk of making a poor decision.

Question

Quizplus · Accepted Answer

In command economies, decision makers are often insulated from the consequences of their actions, making it difficult to properly assess and manage risk. This can result in poor risk management and potentially disastrous consequences. While the government may have control over most activities, this does not eliminate risk entirely. Therefore, option A and B are incorrect. Option C may be true in some cases, but it is not the main reason why risk management is difficult in command economies.

Risk Management in Command Economies