1. Problems with Central Planning
The coordination problem becomes
more difficult as the economy grows.
2. • Because the outputs of many industries serve as inputs to
other industries, the failure of any single industry to achieve
its output target causes a chain reaction of repercussions.
• Which means the second industry cant do anything until the
first industry is done making the output, because they need
what the first industry has.
• Planning techniques that had worked for the simpler economy
proved inadequate and inefficient as the economies grew.
3. • Russia was the worlds 15th largest car
producer in 2010, and accounts for about 7%
of the worldwide production. In 2009 the
industry produced 595,807 light
vehicles, down from 1,469,898 in 2008 due to
the global financial crisis.