Econ Test 2 Part 3

Card Set Information

Econ Test 2 Part 3
2012-11-13 14:15:48
Econ Test Part

Econ Test 2 Part 3
Show Answers:

  1. Socialist Dream vs. Reality
    • Dream: what you were taught in school
    • Reality: what you saw on the street
  2. Socialist Dream
    • workers are in control
    • fast economic growth
    • equal job opportunities
    • lots of consumer goods
    • government's role: central planning then withering away of the gov't, safety net for everyone
  3. Socialist Reality
    • bureaucrats are in control
    • fast accomplishments at first, then slower and slower
    • women had professional positions
    • military goods, consumer shortages
    • new types of inequality
    • government's role: no withering, good basic safety net
  4. How are centrally planned production decisions made?
    • comprehensive central plans told everyone what to produce
    • state ownership of businesses and farms and natural resouces (private businesses were ususally illegal)
  5. Who gets the results?
    • low skilled workers: got higher wages, virtually no unemployment, consumer necessities were heavily subsidized (cheap/free housing, transportation, education, healthcare)
    • people with political connections
    • middle class professionals: women gained more professional opportunities
  6. Who were the nomenklatura?
    people who had easy access to luxury goods
  7. What was Comecon? 
    • aka Council for Mutual Economic Assistance (CMEA)
    • planned trade between the Soviet bloc countries
    • central planning body
    • encouraged each country to specialize based on their comparative advantage
  8. In terms of information issues, why is a market system more efficient than a centrally-planned one? 
    • too much information had to be gather and processed
    • info inaccuracies
    • info processing was very slow
    • diseconomies of scale (info problems inside companies)
  9. What were state farm results, and how does the left-wing/right-wing idea explain them?
    • left wing crops and animals vs. right wing crops and animals
    • socialist farms can produce some crops and animals without too much problem (left wing)
    • other crops and animals where better when raised in a free market environment (right wing)
    • socialist farms had an easier time growing wheat than raising cattle
  10. Businesses were politicized. Why was this bad for efficiency?
    • people became manegers based on their connections, not by their skills
    • resource allocation was influenced by political plans, bribes, and hoarding
    • socialist business reports exaggerated successes and hid mistakes