In a command (planned) economy, which of the following is true?

Multiple choice question for Introduction To Economics. Select an option, then review the explanation below.

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Prices serve as the main motivator for production decisionsThe government directs how resources are distributedPrivate companies independently decide their production methods and outputsThe private sector dominates economic activitiesMarket competition determines resource allocation

Explanation

In a command or planned economy, the government controls resource allocation rather than relying on market forces or price signals. Individual firms do not independently decide production, and the public sector typically plays a significant role.

Practice related questions from the same subject.

1.Which of the following factors directly influences the supply curve?
2.Under what condition is a market considered to be in equilibrium?
3.What type of relationship is depicted when a graph shows that as the values on the horizontal axis increase, the values on the vertical axis decrease?
4.Which two elements are essential to construct a straight-line graph?
5.How can a nominal value be converted into a real value?

In a command (planned) economy, which of the following is true?

Explanation

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