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Difficulty: HardMeaning, Types, and Features of Economic Planning

In economic planning, functional planning seeks to radically transform an economy's fundamental institutional setup and property relations, whereas structural planning operates entirely within existing socio-economic structures to repair market inefficiencies.

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Answer

The statement is False. Structural planning is designed to modify or rebuild the underlying socio-economic and institutional framework of an economy, whereas functional planning operates within the established economic framework to correct imbalances without altering property rights or structural institutions.
The statement incorrectly swaps the definitions of structural and functional economic planning. Structural planning targets fundamental institutional reforms and property relations, while functional planning operates within existing socio-economic boundaries.

Step-by-Step Solution

1
Analyze the definition of functional planning in economic literature.
Functional planning accepts existing institutional, social, and economic frameworks, seeking to solve economic problems by modifying parameters (e.g., taxes, interest rates, price controls) without changing the core system.
Understanding the boundary of functional planning establishes what it can and cannot alter.
2
Analyze the definition of structural planning.
Structural planning deliberately changes institutional arrangements, ownership of resources, or fundamental socio-economic structures to achieve long-term economic development goals.
Structural planning is defined by system-level transformation rather than marginal adjustment.
3
Evaluate the accuracy of the given statement.
The statement attributes radical structural transformation to functional planning and system-preserving adjustments to structural planning, which is incorrect.
The concepts have been directly inverted.

Key Concept

Distinction between Functional Planning and Structural Planning
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Topics

Meaning, Types, and Features of Economic Planning