Which Statement Best Describes a Command Economy?
In a command economy, the government controls all aspects of the economy, including the production of goods and services, the distribution of resources, and the prices of goods and services. The government makes these decisions based on its own goals and priorities, rather than on the demands of consumers or the market.
Which statement best describes a command economy?
The answer to this question is (B): "The production and allocation of goods and services is determined primarily through government." This is because in a command economy, the government is the sole decision-maker for all economic activity. The government decides what goods and services will be produced, how much of each good or service will be produced, and who will receive each good or service.
Here are some other statements that could be considered to describe a command economy:
- The government owns all businesses and resources.
- The government sets prices for goods and services.
- The government controls the allocation of labor and capital.
- The government’s goals are more important than the needs of consumers.
Additional questions and discussion
Here are some additional questions and discussion points related to the statement "The production and allocation of goods and services is determined primarily through government":
- What are the advantages and disadvantages of a command economy?
- What are some examples of command economies in the past?
- Do any command economies exist today?
Advantages of a command economy
One advantage of a command economy is that it can be used to achieve a specific set of goals, such as economic growth, social equality, or national security. For example, a command economy can be used to prioritize the production of essential goods, such as food and medicine, or to invest in research and development.
Another advantage of a command economy is that it can be used to reduce inequality. In a market economy, the distribution of wealth is determined by the market, which can lead to a concentration of wealth in the hands of a few people. In a command economy, the government can redistribute wealth through taxation or other means.
Disadvantages of a command economy
One disadvantage of a command economy is that it can be inefficient. In a market economy, businesses compete with each other to produce goods and services that consumers want. This competition leads to innovation and efficiency. In a command economy, the government is the sole decision-maker, which can lead to waste and inefficiency.
Another disadvantage of a command economy is that it can be oppressive. The government has a great deal of power in a command economy, and this power can be used to suppress dissent or control the lives of citizens.
Examples of command economies
Some examples of command economies in the past include the Soviet Union, China, and Cuba. These economies were all characterized by government ownership of businesses and resources, government control of prices, and government planning of economic activity.
Command economies today
Today, there are very few pure command economies. Some countries, such as China and North Korea, still have significant government control of the economy. However, these economies are also moving towards a more market-oriented system.
In conclusion, the statement "The production and allocation of goods and services is determined primarily through government" is the best description of a command economy. Command economies are characterized by government ownership of businesses and resources, government control of prices, and government planning of economic activity.
