Question

(21)
To move from a system of central planning to a market system, an economy generally implements which of the following steps? Nationalization of industry Privatization of capital Regulation of prices Transition from agriculture to industry
(22)
Which of the following factors contributed to the difficulty of the transition in the former Soviet Union? Capital was not privatized. Households preferred the communist system. Free market institutions were not in place. Tax rates were excessively high.
(23)
How are resources allocated in market and centrally planned economies? Prices allocate resources in a market economy; central planners allocate resources in a centrally planned economy. The supply of and demand for money determine the allocation of resources in a market economy; the people allocate resources themselves in a centrally planned economy. Corporations determine the allocation of resources in a market economy; central planners allocate resources in a centrally planned economy. Voters determine the allocation of resources in a market economy; central planners allocate resources in a centrally planned economy.
(24)
Which of the following policy measures would help prevent rapid inflation following the deregulation of prices? Setting interest rates at a fixed and constant rate Maintaining price controls on some basic goods, such as bread and fuel Maintaining tight control over the money supply Creating an inflation board to monitor price increases
(25)
The role of the price of labor in a market economy is to guarantee that resources are always allocated to their most efficient use. provide information about where resources are best employed and to give workers an incentive to work hard. ensure that workers are fairly paid for the work they do. motivate people to change jobs frequently, increasing the level of income in the economy.

Answer 1

Q21) answer is option B) , capital privatization

optiona & c are wrong

Nationalization of resources & price regulation are characteristic of centrally planned Economy

Q22) option a)

Capital was governed & allocated by central planners

Q23) option a)

In a market, resources are allocated based on the demand/supply in which prices play an signalling function as it allocates resources to the production of different types of goods. also acts as signalling mechanism between buyers and sellers; telling them how much and what to produce.

Where as social planners determine allocation in centrally planned economy

Q24) option c)

Control money supply to prevent inflation

Q25) option a)

Price mechanism ensure that resources are allocated efficiently in market system .