Economics 9708 · AS & A Level · Resource allocation in different economic systems

Resource allocation in different economic systems — practice question

When some former command economies have moved towards market economies, they have sometimes taken a gradual approach. This has involved keeping certain parts of the command system in place. Which is not a valid short-run reason for retaining the feature shown?

  • Ainconvertible currency – to attract foreign direct investment
  • Bprice controls on foodstuffs – to protect the real value of workers’ incomes
  • Cstate ownership of banks – to avoid large-scale bankruptcies
  • Dtariffs on imported manufactures – to allow comparative advantage to develop

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