Question

Which of the following is an economic argument in favor of decentralized planning?

• A. It leads to greater income inequality and concentration of wealth.
• B. It allows the central government to better control inflation and unemployment.
• C. It improves the efficiency of resource allocation by catering to local demands.
• D. It reduces the need for public services and social welfare programs.

Answer 1

Answer:

C. It improves the efficiency of resource allocation by catering to local demands.

• When resources are allocated based on local needs, it is more likely to be efficient, as it avoids waste on projects that are not locally relevant.