How are prices and wages typically determined in a communist economic system?
Understand the Problem
The question asks about the typical mechanisms for determining prices and wages within a communist economic system. This requires understanding the core principles of communist economics regarding resource allocation and labor valuation.
Answer
In a communist economy, the government determines prices and wages.
In a communist economic system, prices and wages are typically determined by the central or state government, and prices are regulated by the State with little regard for the actual costs of production.
Answer for screen readers
In a communist economic system, prices and wages are typically determined by the central or state government, and prices are regulated by the State with little regard for the actual costs of production.
More Information
Communist economic systems are also referred to as 'command economies' or 'centrally planned economies'.
Tips
It is important to remember that the 'government' in these types of economies is a central authority, and not necessarily democratically elected.
Sources
- The 4 Economic Systems - lakechamplainwaldorfschool.org
- Reading: The Communist Economic System | International Business - courses.lumenlearning.com
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