Question

B. A Venezuelan-style economic collapse would be less likely in a mixed economy like the United States because

Answer 1

Answer:

• a. corruption is less likely when economic power is more diffused.

• b. private industry has strong financial incentives to produce efficiently.

Explanation:

Venezuela is a planned / command economy which means that the government directs production of goods and services in the country. This can lead to corruption as those in government would become quite powerful and engage in activities that would make them richer at the expense of the nation because they will have the required access to do so.

As the government directs most things, there is less private industry and competition. With a lack of competition, companies will not see the need to compete and would end up being inefficient.

These are what happened in Venezuela.