11
QuizMultiple Choice

Introduction to Economics — Test

Question 11 • Economics (Full-Year)

What is one likely disadvantage of the centralized economic planning used in a command economy?

Answer
A
a lack of workers to produce and distribute goods and services
B
a shortage of subsidies for food, housing, and utilities
C
a shortage of supplies resulting from an underproduction of goods
D
a lack of information about production goals and priorities

Explanation

In a command economy, planners decide what and how much to produce. If they misjudge people’s needs or available resources, they may set production too low, causing shortages of goods and supplies. This makes “a shortage of supplies resulting from an underproduction of goods” the likely disadvantage. Workers and production goals are generally assigned through the planning system, and subsidies are not necessarily lacking.

AI-written and checked against the verified answer.

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