How are economic decisions made in a command economy?
Understand the Problem
The question is asking about the processes and principles behind economic decision-making in a command economy, where the government typically has significant control over the economy and makes decisions regarding production, investment, and resource allocation.
Answer
Economic decisions are made by the government.
In a command economy, economic decisions regarding production, pricing, and distribution are made by the government or central authority.
Answer for screen readers
In a command economy, economic decisions regarding production, pricing, and distribution are made by the government or central authority.
More Information
Command economies are typically associated with countries that have a high degree of centralization and government control, such as the former Soviet Union and North Korea.
Tips
Don't confuse a command economy with a free-market economy, where decisions are driven by private individuals and market forces.
Sources
- Command Economy: Definition, How It Works, and Characteristics - investopedia.com
- What Is a Command Economy? - The Balance - thebalancemoney.com
- Command economy | Definition, Characteristics, Examples, & Facts - britannica.com
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