Central planning of resource allocation:
A) was attempted by the United States during the 2007-2009 financial crisis.
B) can succeed even if the central planners do not have perfect information on the best uses of resources.
C) was the dominant economic planning method used in both the former Soviet Union and China.
D) insures all resources are used appropriately.

Question

Quizplus · Accepted Answer

Central planning of resource allocation was the dominant economic planning method used in both the former Soviet Union and China. While it can succeed in allocating resources, it has been shown to be less efficient than market-based systems, and is often criticized for lacking flexibility and responsiveness to changing conditions. The United States did not attempt central planning during the 2007-2009 financial crisis, but instead implemented policies to stabilize financial markets and increase liquidity. Central planning does not necessarily insure that all resources are used appropriately, as it depends on the effectiveness and accuracy of the central planners' decisions.

Central Planning of Resource Allocation