Question 1

&#34;When the market system fails, the government must intervene for the sake of the society&#34; is the statement of a&#10;A) Conservative.&#10;B) Radical.&#10;C) Liberal.&#10;D) None of the above.

Accepted Answer

This statement aligns with the principles of liberalism, which supports a market-based economy but also recognizes the need for government intervention to address market failures, such as monopolies, externalities, and information asymmetry. Liberals believe that government intervention is necessary to ensure that the market system operates in the best interests of society as a whole. Conservatives, on the other hand, generally believe in minimal government intervention and trust the market system to correct itself. Radicals may advocate for much more extensive government intervention or even a complete overhaul of the capitalist system.

Question 2

To the Conservative, more planning implies&#10;A) a better standard of living.&#10;B) more jobs.&#10;C) misallocation of resources.&#10;D) more personal freedom.

Accepted Answer

To the Conservative, more planning implies misallocation of resources because they believe that the government should have a limited role in the economy and that market forces should determine the allocation of resources. More planning would mean more government intervention and potential inefficiencies in the allocation of resources. The Conservative viewpoint prioritizes individual freedom and limited government intervention over government planning for economic growth or job creation.

Question 3

Support for planning from the Radical view is primarily justified in terms of&#10;A) profit maximization.&#10;B) public interest criteria.&#10;C) the irrelevance of economic efficiency as an objective.&#10;D) creating a humane society.

Accepted Answer

The Radical view of planning emphasizes the creation of a humane society, where social justice is prioritized over profit maximization or economic efficiency criteria. This view argues that planning should be oriented towards empowering marginalized groups and addressing systemic inequalities to achieve a more just and equitable society.

Question 4

The basic ideological difference between Liberals and Conservatives on the one hand and Radicals on the other is that Radicals&#10;A) believe in profit maximization.&#10;B) advocate industrial policy.&#10;C) believe that government intervention is necessary.&#10;D) would not try to save capitalism.

Accepted Answer

The basic ideological difference between Liberals and Conservatives on the one hand and Radicals on the other is that Radicals would not try to save capitalism. Radicals believe that capitalism is inherently flawed and that it cannot be reformed to address the social, economic, and environmental problems that it creates. Instead, they advocate for a fundamental restructuring of society and the economy based on principles of social and economic justice. This typically involves significant government intervention and the creation of alternative models of economic organization, such as cooperatives and public ownership.

Question 5

Which of the following is not offered as evidence in a Liberal justification for more planning?&#10;A) The size and complexity of industry.&#10;B) Chronic high levels of unemployment.&#10;C) The undesirability of production for profit.&#10;D) The decreasing competitiveness of the United States.

Accepted Answer

The undesirability of production for profit is not typically offered as evidence in a liberal justification for more planning. Instead, liberals may argue that planning is necessary to address issues such as the size and complexity of industry, chronic high levels of unemployment, and the decreasing competitiveness of the United States.

Question 6

Conservatives would&#10;A) support an industrial policy that was geared toward efficiency in the marketplace.&#10;B) support an industrial policy that targeted the high and biotechnology sectors.&#10;C) not support any type of industrial policy.&#10;D) None of the above.

Accepted Answer

Conservatives generally believe in limited government intervention and control in the economy. Therefore, many conservatives would not support any type of industrial policy, as they see it as government interference in the free market.

Question 7

According to the Conservative view, the principal loser under central planning is&#10;A) business.&#10;B) government bureaucrats.&#10;C) labor unions.&#10;D) consumers.

Accepted Answer

Conservatives believe that central planning results in government control over the economy, leading to limited choices and higher prices for consumers. Businesses may also suffer under central planning, but the focus is on the negative impact on individual consumers.

Question 8

Liberals refute the Conservative claim that planning will end capitalism with all of the following arguments except&#10;A) the world marketplace is too complex to operate like Adam Smith's analysis of eighteenth-century English capitalism.&#10;B) social anarchy will be the eventual outcome if society is left to the hands of the marketplace.&#10;C) planning is necessary to break down class barriers.&#10;D) private property will eventually be destroyed if there is no planning.

Accepted Answer

The arguments given in A, B, and D are all commonly used by liberals to refute the Conservative claim that planning will end capitalism. However, argument C is not typically invoked in this context. While liberals may argue that planning can help reduce income inequality and promote social mobility, they do not typically claim that planning is necessary to break down class barriers in a fundamental sense. As such, this argument does not directly contradict the Conservative claim that planning will end capitalism.

Question 9

Radicals believe that Liberal targeted &#34;tax-cut&#34; planning&#10;A) is innovative economics used to stimulate private-sector profitability.&#10;B) causes short-run profits to rise, but results in a long-term rise in costs and a decline in inflation-adjusted wages.&#10;C) eventually brings about a lower rate of unemployment.&#10;D) makes wage controls mandatory.

Accepted Answer

Radicals believe that Liberal targeted "tax-cut" planning causes short-run profits to rise but results in a long-term rise in costs and a decline in inflation-adjusted wages. They argue that tax cuts lead to a decrease in government revenue, which ultimately leads to a reduction in social programs and an increase in the national debt. Additionally, they argue that the benefits of tax cuts primarily go to the wealthy, while the costs are borne by the working class.

Question 10

Radicals believe that social planning&#10;A) can only be truly achieved through a violent class revolution.&#10;B) should be run similar to that of the old Soviet Union, where people's needs were claimed to come first.&#10;C) must begin with popular participation and deal with the problems of the people.&#10;D) All of the above.

Accepted Answer

Radicals believe that social planning must begin with popular participation and deal with the problems of the people. They do not necessarily advocate for violence or Soviet-style central planning.

Question 11

Soviet-style central planning, with its enormous success in creating jobs, has long been supported by American Radicals.

Accepted Answer

The answer of Soviet-style central planning, with its enormous success...

Question 12

Conservatives are generally willing to accept a halfway house on the road to planning, that is, some controls on output and prices.

Accepted Answer

The answer of Conservatives are generally willing to accept a...

Question 13

According to the Liberal view, all profit controls are undesirable because they choke off new investment.

Accepted Answer

The answer of According to the Liberal view, all profit...

Question 14

Conservatives hold that although administrative planning has brought about high rates of growth in output and employment in some developing nations, it cannot be effective in complex, advanced countries.

Accepted Answer

The answer of Conservatives hold that although administrative planning has...

Question 15

&#34;Planning&#34; is acceptable to Conservatives only if it is determined by individual choices collectively expressed in the market.

Accepted Answer

The answer of &#34;Planning&#34; is acceptable to Conservatives only if...

Question 16

It is the Liberals contention that tax-subsidy incentives, joint planning participation by labor and capital, and the careful setting of output targets will avoid many of the inefficiencies and crises that develop in unplanned markets.

Accepted Answer

The answer of It is the Liberals contention that tax-subsidy...

Question 17

Liberals and Radicals agree that capitalism needs planning.

Accepted Answer

The answer of Liberals and Radicals agree that capitalism needs...

Question 18

According to Radicals, greed and not concern for society's welfare is why some businesses have endorsed the idea of an industrial policy.

Accepted Answer

The answer of According to Radicals, greed and not concern...

Question 19

&#34;Indicative planning,&#34; such as that used in France and Japan, was first used in the United States in the 1960s.

Accepted Answer

The answer of &#34;Indicative planning,&#34; such as that used in...

Question 20

Planning, quite apart from its recent &#34;bad press,&#34; has a strong tradition and deep roots in American economic practice.

Accepted Answer

The answer of Planning, quite apart from its recent &#34;bad...

Deck 15: Ideological Differences and Justifications for Planning in Economics