"Because the outputs of many industries are the inputs to other industries, the failure of any single industry to fulﬁl the output quantities speciﬁed in the central plan caused a chain reaction of adverse
Repercussions on production." This quotation best identiﬁes the
A) incentive problem under central planning.
B) self-suﬃciency dilemma under communism.
C) resource overcommitment problem under communism.
D) coordination problem under central planning.

Question

Quizplus · Accepted Answer

The quotation describes the problem of coordination under central planning, where the failure of one industry to meet its output targets would have a ripple effect on other industries that depend on its inputs. This highlights the challenge of ensuring all the different parts of the economy work together smoothly to achieve the overall plan, which is a key feature of central planning systems.

"Because the Outputs of Many Industries Are the Inputs to Other