One basic problem faced by central planners, but hardly present in a market system, has to do with:
A) Determining the production goals or targets in a factory
B) Having limited resources and trying to match them with unlimited wants
C) Coordinating production in various industries so that bottlenecks do not develop
D) Providing financial resources for increasing the real flows of products in the economy

Question

Quizplus · Accepted Answer

In a market system, production is guided by the invisible hand of market forces, and individual firms work to maximize their own profits by responding to price signals. But central planners have to coordinate production across various industries, so that bottlenecks do not develop. They have to ensure that each industry produces enough inputs for other industries to operate smoothly, and that finished goods can be transported to their intended destinations. This requires a great deal of information, which is often difficult to obtain, and central planners may lack the incentives to make efficient decisions. As a result, production targets may be set too high or too low, and bottlenecks may still occur. This is a basic problem faced by central planners, but hardly present in a market system.

One Basic Problem Faced by Central Planners, but Hardly Present