Answered

What is one characteristic of a command economy?

1) Citizens are responsible for providing their own health care.

2)Citizens can easily start their own businesses.

3)The government controls the prices of most goods.

4)The government prohibits the use of money.

Verified Answer :

Evadin2019

One of the characteristics of a command economy is the government controls the prices of most goods and services.


Further explanation

A command economy is where the government makes all economic decision. It doesn't allow market forces such as demand and supply to determine what, how much, and at what price they should produce goods.

The goals of the command economy are to create equality within a society and to use resources to maximize social welfare.

Five characteristics of the command economy are:  

  1. The government creates a central economic plan.
  2. The government allocates all resources according to the central economic plan.
  3. The central economic plan makes prioritize for goods productions and services.

  4. The government owns monopoly businesses.
  5. The government creates laws and regulation to enforce the central economic plan.

Another type of economic system is a market economy, traditional economy, and a mixed economic system. Nowadays, many command economies began adding aspects of the market economy, we call it a mixed economic system.


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Keywords: command economy, central government, characteristic of a command economy, economic system

The correct option is (c) the government controls the prices of most goods.


Further Explanation:

Command economy is also known as a planned economy. When the planners of central government control or own the means of production and when they determine the output’s distribution, it is referred to as the command economy. This type of economy suffers from problems like poor incentives for workers, planners and managers in state-owned enterprises.

The planners of the central government in a command economy are failed to rationally determine proportions, quantities, locations, methods, and the timings of economic activities.


CHARACTERISTICS OF COMMAND ECONOMY

1. The goods and services are controlled by the government.

2. The finance decisions in the country are taken by the government.  

3. The state has power over resources.

4. It has privately-owned entities as well as state-owned entities. The state controls these entities.

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Answer Details:

Grade: High School

Chapter: Command Economy

Subject: Social Studies


Keywords: government, command economy, planned economy, means of production, state, incentives, proportions


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