One of the biggest problems with centrally planned economies is that:
A) central planners have limited information on the true value of the various ways to utilize scarce resources.
B) they fail to reach economic efficiency because their policies limit global trade.
C) workers have little incentive to work for the central planner.
D) they typically have higher levels of corruption compared with market economies.

Question

Quizplus · Accepted Answer

Central planners have limited information on the true value of the various ways to utilize scarce resources. This leads to inefficient resource allocation and can result in shortages or surpluses of goods and services. Market economies, on the other hand, rely on price signals to allocate resources efficiently based on consumer demand.

One of the Biggest Problems with Centrally Planned Economies Is