The central planning approach failed to optimally allocate oil during the 1973-1974 oil crisis because of problems of:
A) demand and supply.
B) markets and prices.
C) resources and budgets.
D) information and incentives.

Question

Quizplus · Accepted Answer

The central planning approach failed to optimally allocate oil during the 1973-1974 oil crisis due to problems of information and incentives. The central planners did not have access to accurate information about the supply and demand of oil, and they lacked the proper incentives to allocate resources efficiently. As a result, the allocation of oil was not optimal, which led to shortages and price increases.

The Central Planning Approach Failed to Optimally Allocate Oil During