Question

Which statement best describes a command economy?

1) The production of goods and services is determined primarily by markets, but the allocation of goods and services is determined primarily by government.
2) The production and allocation of goods and services is determined primarily through markets.
3) The production of goods and services is determined primarily by government, but the allocation of goods and services is determined primarily by markets.
4) The production and allocation of goods and services is determined primarily through government.

Answer 1

A command economy is characterized by government regulation and control over the production and allocation of goods and services, setting prices, production methods, and worker wages, and often providing necessities like healthcare and education for free. Countries such as Cuba and North Korea are current examples of command economies.

Step-by-step explanation:

The statement that best describes a command economy is as follows: the production and allocation of goods and services are determined primarily through government intervention. Unlike market economies where the decisions regarding the production and distribution of goods and services are made by private individuals and businesses based on market demands and price signals, a command economy relies on the government to make these decisions. Factors such as what goods and services will be produced, how they will be produced, and for whom they are produced are centrally planned and managed by government entities. This can include setting the prices for goods and services, deciding the methods of production, and establishing wages for workers. Government may also provide many necessities like healthcare and education for free. Examples of countries with command economies include Cuba and North Korea.