What is a problem encountered when an economy makes the transition to capitalism from communism?

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2026-05-11 14:00

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there is rising unemployment.formerly the government tried to employ more people than necessary,but when there is privatisation,firms become efficient with the view to maximise profit.they sack labour if costs are rising and labour not productive.there is also competition due to which inefficient firms are forced out of business and thus unemployment.

INFLATION-there is the illusion of low price in the planned market-govt sets maximum prices but later on firms set price equal to costs of production.

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