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Question

What is a major disadvantage of a centrally planned economy?

It offers too many choices for consumers.

It has no control over which goods and services are provided.

It cannot meet consumers’ needs and wants.

Its military forces are too weak to be effective.

Answer 1

The major disadvantage of a centrally planned economy is that it cannot meet consumers’ needs and wants.

In a centrally planned economy, the government makes all decisions about the production and distribution of goods and services, which can lead to inefficiencies and a lack of responsiveness to consumer preferences. As a result, the economy may produce goods that are not in demand or fail to produce enough of what consumers actually need, leading to shortages and dissatisfaction.