Which of the following best describes a 'command' ('planned') economy?

Question

BlackTom AI · Accepted Answer

Question: Which of the following best describes a 'command' ('planned') economy?

Option a: 'An economic system where the consumers make all of the economic decisions' - This describes a market-oriented view where consumer preferences drive demand and resource allocation, not a command economy. It misattributes decision-making authority by placing it with consumers alone, which is inconsistent with centralized planning.

Option b: 'An economic system where both firms, governments and consumers make all of the economic decisions' - This suggests a highly pluralistic decision-making process, potentially resembling some cooperative or mixed-economy models. In a classic command economy, decision power is not shared among firms and consumers; central authorities predominantly set objectives and allocate resources, so this description overstates decentralization.

Option c: 'An economic system where firms makes all of the economic decisions' - If firms alone were deciding all allocations, you would have a firm-centric or market-based arrangement with little to no government direction. This contradicts the essence of a command economy, which centralizes planning rather than outsourcing decisions to individual firms.

Option d: 'An economic system where the government makes all of the economic decisions' - This aligns with the standard definition of a command or planned economy. In such systems, the government (often a central planning authority) determines production quotas, resource allocation, prices, and investment, rather than relying on market forces or private actors to decide.

Reasoning about the contrasts helps clarify why option d matches the concept: central authority, planned allocation, and absence (or strong limitation) of market-driven decision-making. The other options describe conditions that resemble market-oriented, mixed, or mixed-decision structures rather than a pure command/planned economy.

MUF0061 Economics Unit 1 - Semester 1, 2025 Video and Questions – Economic Systems (5 - 7 minutes)

Which of the following best describes a 'command' ('planned') economy?

View Explanation

Log in for full answers

Similar Questions

Question at position 59 Capitalism is a way of organizing economic life that is characterized by private ownership of the means of production.public ownership of the means of production.government-controlled markets.cooperation over competition.

Which of the following is determined by an economic system? BlackTom题目解析

Which are major decisions that must be addressed by an economic system? (More than one answer may be correct.) BlackTom题目解析

For which of the following types of economies would the factors of production depend on the relative distribution of market forces versus command forces?

Entrepreneurs and investors are allowed to receive all profits (net of taxes) that their firms earn. The rights to profits described here are most likely to occur with:

What type of economic system do most countries in the world today have?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler