Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

"When the market system fails, the government must intervene for the sake of the society" is the statement of a

Accepted Answer

A)   Conservative.
B)   Radical.
C)   Liberal.
D)   None of the above. C

Question 3

Support for planning from the Radical view is primarily justified in terms of

Accepted Answer

A)   profit maximization.
B)   public interest criteria.
C)   the irrelevance of economic efficiency as an objective.
D)   creating a humane society. D

Question 4

Radicals believe that Liberal targeted "tax-cut" planning

Accepted Answer

A)   is innovative economics used to stimulate private-sector profitability.
B)   causes short-run profits to rise, but results in a long-term rise in costs and a decline in inflation-adjusted wages.
C)   eventually brings about a lower rate of unemployment.
D)   makes wage controls mandatory.

Question 5

Radicals believe that social planning

Accepted Answer

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

Question 6

"Indicative planning," such as that used in France and Japan, was first used in the United States in the 1960s.

Accepted Answer

A) True 
 B)False

Question 7

"Planning" is acceptable to Conservatives only if it is determined by individual choices collectively expressed in the market.

Accepted Answer

A) True 
 B)False

Question 8

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

A) True 
 B)False

Question 9

According to the Conservative view, the principal loser under central planning is

Accepted Answer

A)   business.
B)   government bureaucrats.
C)   labor unions.
D)   consumers.

Question 10

Liberals and Radicals agree that capitalism needs planning.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not offered as evidence in a Liberal justification for more planning?

Accepted Answer

A)   The size and complexity of industry.
B)   Chronic high levels of unemployment.
C)   The undesirability of production for profit.
D)   The decreasing competitiveness of the United States.

Question 12

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

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

The basic ideological difference between Liberals and Conservatives on the one hand and Radicals on the other is that Radicals

Accepted Answer

A)   believe in profit maximization.
B)   advocate industrial policy.
C)   believe that government intervention is necessary.
D)   would not try to save capitalism.

Question 15

Conservatives would

Accepted Answer

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

Question 16

To the Conservative, more planning implies

Accepted Answer

A)   a better standard of living.
B)   more jobs.
C)   misallocation of resources.
D)   more personal freedom.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Liberals refute the Conservative claim that planning will end capitalism with all of the following arguments except

Accepted Answer

A)   the world marketplace is too complex to operate like Adam Smith's analysis of eighteenth-century English capitalism.
B)   social anarchy will be the eventual outcome if society is left to the hands of the marketplace.
C)   planning is necessary to break down class barriers.
D)   private property will eventually be destroyed if there is no planning.

Exam 15: Ideological Differences and Justifications for Planning in Economics

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

"When the market system fails, the government must intervene for the sake of the society" is the statement of a

Support for planning from the Radical view is primarily justified in terms of

Radicals believe that Liberal targeted "tax-cut" planning

Radicals believe that social planning

"Indicative planning," such as that used in France and Japan, was first used in the United States in the 1960s.

"Planning" is acceptable to Conservatives only if it is determined by individual choices collectively expressed in the market.

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.

According to the Conservative view, the principal loser under central planning is

Liberals and Radicals agree that capitalism needs planning.

Which of the following is not offered as evidence in a Liberal justification for more planning?

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

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

The basic ideological difference between Liberals and Conservatives on the one hand and Radicals on the other is that Radicals

Conservatives would

To the Conservative, more planning implies

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

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.

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

Liberals refute the Conservative claim that planning will end capitalism with all of the following arguments except