In a centrally planned economy,
A) unemployment has always been very widespread.
B) wages tend to be exceptionally high for low-skill jobs and low for high-skill jobs.
C) the labor market does not function freely and there is essentially no such thing as unemployment.
D) laborers have remained unemployed because of technology displacement.

Question

Quizplus · Accepted Answer

In a centrally planned economy, the government controls the labor market and decides who works where and at what wages. Therefore, there is essentially no such thing as unemployment since everyone who is able to work is assigned a job by the government. This means the labor market does not function freely, and the government decides the wages for all jobs regardless of skill level. Technology displacement may occur, but it is not the primary cause of unemployment in this type of economy.

In a Centrally Planned Economy