In a centrally planned economy, the government has minimal control over business activities, and prices are set by supply and demand.
Understand the Problem
The question is describing characteristics of a centrally planned economy, particularly focusing on the level of government control over businesses and the determination of prices by supply and demand.
Answer
The government has significant control in a centrally planned economy, not minimal.
The statement in the question is incorrect. In a centrally planned economy, the government has significant control over business activities, and prices are not set by supply and demand but are determined by the government.
Answer for screen readers
The statement in the question is incorrect. In a centrally planned economy, the government has significant control over business activities, and prices are not set by supply and demand but are determined by the government.
More Information
In a centrally planned economy, the government makes all decisions about the production and distribution of goods and services. This system contrasts with free-market economies, where decisions are driven by market forces.
Tips
A common mistake is confusing centrally planned economies with market economies. Remember that in centrally planned economies, the government dictates economic activity.
Sources
- Centrally Planned Economy: Features, Pros & Cons, and Examples - investopedia.com
- Differences between free-market, mixed and centrally-planned ... - tutor2u.net
- Command Economy | Definition + Characteristics - Wall Street Prep - wallstreetprep.com
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